IHT400, RNRB & transferable NRB

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82046873#Comment_82046873

Excellent, therefore a straightforward IPDI trust established under your mother's Will which importantly preserved her transferable nil rate bands across the board whilst the trust was in exsistence and remain wholly intact following the subsequent winding-up of that trust in your father's lifetime.

Returning to your original query, since you have to complete the IHT 400 to claim your father's residence nil rate band, you have no option but to complete the IHT402 for your mother's transferable £325k NRB also. A bit tedious but necessary since you are demonstrating to HMRC's satisfaction no IHT is due.

yetanotherusername

Thanks @poseidon1 and @Keep_pedalling for all your help, much appreciated.

yetanotherusername

Sorry @poseidon1 and @Keep_pedalling , I do have another couple of queries on the IHT402 form re the transferable NRB.

1. Questions 13 -17. If the house went into trust and her estate passed to my dad, al of these will be £0 won't they?
2. Should I include the winding up of trust docs when I submit the form?

Thanks again :)

poseidon1

Yes the answers will be no across the board, since the gift into trust of half share of the house in favour of your father is treated exactly the same as if it were gifted into his direct personal ownership, and therefore a wholly exempt spousal transfer from your mother and disregarded in question 13.

With regard to the winding up of the trust in his favour prior to his death, again no necessity for HMRC to see that document.

For IHT purposes your mother's half share of the property was deemed to 'beneficially' belong to him whilst in the trust, whilst the subsequent termination merely merge both this beneficial entitlement under the terms of the trust with the legal ownership previously vested with the trustees . Therefore there was no material change to his beneficial entitlements in the property ( for IHT purposes) both before and after the termination.

yetanotherusername

https://forums.moneysavingexpert.com/discussion/comment/82051886#Comment_82051886

That's great & thank you again