RNRB unused query

cheshireperson

Hi . I thought I’d got my head around this , but am now questioning my calculations due to differing posts on here. My Mum passed away in August 2016 and everything passed to my Dad who we lost in March this year. As there was no RNRB in place in 2016 , can I claim it ? I thought I could claim the full £175 k but now I’m not sure . The wording on official guidance is unclear . Thank you 

Nomunnofun1

Second sentence:

https://www.gov.uk/guidance/inheritance-tax-transfer-of-threshold

cheshireperson

Thank you . I’d read that but somebody on here said it wasn’t  the case ! 

jem16

cheshireperson said:

Thank you . I’d read that but somebody on here said it wasn’t  the case ! 

You can certainly use the RNRB but it’s £100k not £175k

SoozyJ22

I've just done the IHT for a similar scenario and it is the full £175,000 that's available. 

This page is quite clear about how it's calculated and is in line with the workings on IHT436. In the example it's £150,000 because the death was in 2019, but for a death in the current year it would be £175,000.

https://www.gov.uk/guidance/inheritance-tax-transfer-of-threshold

Edit: I've just seen that the link's already been posted by those arguing it's only £100,000, but the example shows that's incorrect. You may also want to work through an example on IHT436 to see that the end result is a £175,000 allowance as it's based on the % unused at first death (always 100 prior to RNRB being introduced) multiplied by the RNRB in effect at the second death.

cheshireperson

Thanks - you will get why I’m confused as this is also off the HMRC website : 

For deaths before 6 April 2017.

For deaths before 6 April 2017, as there was no RNRB at that time, none can have been used. The brought-forward amount will be 100% of the residential enhancement in force at the later death of the surviving spouse or civil partner.

cheshireperson

Hi SoozyJ22 . That’s the conclusion I came to ! It’s really unclear with the £100k example they give . Thank you . 

SoozyJ22

It threw me a bit when I first saw it. But once you work through the IHT436 it becomes clearer. In our case there is no taper on the first death so box 13 is set to 100% as instructed at box 8:

cheshireperson

Dear SoozyJ22 . Yes I certainly remember filling that in ! There’s a lot of mis information out there . That serves me right for over - researching !! 

Smudgeismydog

It’s why a percentage is used, and not a monetary amount, so that you can benefit from any increases