Shared Residential Nil Rate Band

Timmys_Dad · 15 October 2019 at 9:10AM

My partner and I are both widowed and can use our respective deceased spouses unused IHT. So, we each have a £650k IHT allowance. We are unmarried, Tenants in Common and share the house we live in 50/50. The house is valued at £450k. Can we also share the current £150k RNRB to make a total IHT allowance of £725k each? We both have Wills that specify the property is to be initially inherited by the surviving partner.

Keep_pedalling · 15 October 2019 at 9:36AM

Going by your user name you have at least on child, so could you explain what you mean by the house being initially inherited by the surviving partner please?

Normally people in your situation would leave their half of the house to their children giving the surviving partner a life interest but it does not sound like you have done this in which case the first partner to die cannot use the RNRB.

Edit - it would seem that providing a life interest to a partner who is not a spouse or cilvil partner also loses the RNRB for the first to die, although if you want to protect your child’s inheritance from being lost due to the survivor changing their will a LiT should still be the way to go.

https://www.fjg.co.uk/blog/2019/03/13/the-residence-nil-rate-band-a-common-misunderstanding

From a tax, and possibly pension, position marriage might be a good move.

Timmys_Dad · 15 October 2019 at 10:32AM

Thank you Kp. I have one child, my partner has none. In our Wills, the surviving partner would indeed have a life interest in the property with my half being left to my child. My partners half would be left to her sister. I’ve read your fjg link and understand what you say about being unmarried partners and potentially both loosing the RNRB. Thanks again

Shared Residential Nil Rate Band

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