Downsizing and Residence Nil Rate Band

DippySkippy

I was delighted to find that Residence Nil Rate Band may be applicable where the deceased sold their property - see here

In my case it appears to meet all the criteria 

1. the person sold, gave away or downsized to a less valuable home, on or after 8 July 2015
2. the former home would have qualified for the RNRB if they’d kept it until they died
3. their direct descendants inherit at least some of the estate

(1) is met, (3) is met as one of their children is inheriting part of the estate
But my solicitor is questioning (2) - because the Will placed the property in a a lifetime trust for their unmarried partner - which would mean it wouldnt have qualified, BUT the house had been sold and the proceeds go into the lifetime trust instead. Does this mean the RNRB is not applicable?

Thanks

Keep_pedalling

On the face of it I think the solicitor is correct, especially as the proceeds of the sale are having to into trust for the benefit of the partner as per your other thread.

https://forums.moneysavingexpert.com/discussion/6576841/will-life-interest-in-possession-trust/p2

I think this is one of the most disastrously drafted wills ever to come up on this board. 

DippySkippy

Keep_pedalling said:

On the face of it I think the solicitor is correct, especially as the proceeds of the sale are having to into trust for the benefit of the partner as per your other thread.

https://forums.moneysavingexpert.com/discussion/6576841/will-life-interest-in-possession-trust/p2

I think this is one of the most disastrously drafted wills ever to come up on this board. 

Yup, v depressing. But I'm unclear why it doesnt qualify - what is the definition of 'qualified for the RNRB'. The property had already been sold and seems to meet RNRB requirement - or does it have to qualify in the context of the Will in place (at time if sale or death?)

Keep_pedalling

You probably need a second legal opinion on this from a tax specialist, but condition 2 does not seem to be met because had they kept it until they died it would have not gone into trust rather than to a child. 

DippySkippy

Keep_pedalling said:

You probably need a second legal opinion on this from a tax specialist, but condition 2 does not seem to be met because had they kept it until they died it would have not gone into trust rather than to a child. 

FYI - I have just come off phone to Probate Service asking about this. They said I CAN claim the downsizing allowance, though not sure how much I trust a phone call.

My other thought if I cant claim was to try and get a deed of variance to remove the property from the Will - so the trust is just for £xxxx (still no agreement on removing trust completely) - surely the downsizing would then be allowed?

Keep_pedalling

DippySkippy said:

Keep_pedalling said:

You probably need a second legal opinion on this from a tax specialist, but condition 2 does not seem to be met because had they kept it until they died it would have not gone into trust rather than to a child. 

FYI - I have just come off phone to Probate Service asking about this. They said I CAN claim the downsizing allowance, though not sure how much I trust a phone call.

My other thought if I cant claim was to try and get a deed of variance to remove the property from the Will - so the trust is just for £xxxx (still no agreement on removing trust completely) - surely the downsizing would then be allowed?

I think you are right not to trust what you were told as it is HMRC who apply the rules. I really don’t envy you in having to deal with this mess.