Inheritance Tax: The residence nil rate band explained (2022)

[@TheRetirementCafe]

Do you have any questions about the residence nil rate band?

[@gaffakhan7838]

Hi Justin my father past away may this year . He had residential property which he gave to me 2000. There was no mortgage I lived in property with my father and mother. But in 2008 my father took it back off me . Because I took wrong turn in life with drugs etc. He thought I would remortgage and could not make repayment. But in 2019 I turned my life around back on tracks working and with my wife and kids . So he returned the property back to me with my eldest son on the title deed and myself. How would probate look at this senerio. Is it gift or just returned property would I need to tell them . Am getting different information from different solicitors. Can you shed some light. Thanks

[@TheRetirementCafe]

@@gaffakhan7838 Hi Gaffa, I would think there is a transfer of ownership when the property was registered in your and your son's name. I am not a solicitor, so you need to have this checked out. The land registry will show the ownership details.

[@AmbiNerd]

@@TheRetirementCafe Hello, Hope you can answer this question. What if the estate is over the nil rate band (£325,000) but i am entitled to the Residence nil rate band which is an additional £175,000 (making a total of £500,000 threshold) ? Does that make the estate an excepted estate and not require IHT400 to be done? Or does just the 325,000 only apply?

[@chrishouse6924]

thanks for your time and vid, very informative.

[@pravinshah9045]

Justin thank you for a very helpful video. I have a "will trust" set up with the will. On death this looks like a discretionary trust. Can I change this trust to non discretionary? Will I get the extra £175k additional threshold?

[@Tenzin62]

If there’s no will, and a letters of administration is sought, can we still apply as a child of ge deceased

[@richardbaxter4448]

Its so complex, im an accountant and there is still elements im unclear on that arent on HMRC website (anywhere obvious) - if you could help thatd be great. 1. My grandfather died before the property £175k existed residence NRB, will my nan have his £175k as well as her own? 2. If so, her NRB is total (175+325)x2 = £1m. But her house is worth £500k, will her total NRB be house value £500k or the total value of estate £900k. Wondered if i could pay for an hour of advice at all

[@j66j777]

My father bought the house in my mums name which is worth £425,000 now. Where my dad passed away 4 years later. He also bought another property which is again probably worth £400k and put half into my mums name and half into my brothers. My father passed away a year later after purchasing this. Now is this considered gifts to my mother and brother. Where half of the 400k belongs to brother and we have £425k as our main residence where my mother lived, plus half of the £400k. With chattels and investments, will be around £20k. So about £645k in total of estates. My mother passed away recently, does my mum have any spousal allowances as technically her husband (my dad) put the property in my mothers name, and brothers, so is this classed as a "gift". Also in this instance does the NRB and RNRB apply? What will be the threshold and allowances in this circumstances?

[@TheRetirementCafe]

I'm afraid this is too complex to be answered on a YT comment. I think you need to get legal advice from a STEP-qualified solicitor.

[@jasmineblack9778]

If a husband died & left his half of house worth £100,000 & assets worth £50,000 to his wife.When wife died later on & she has house worth £230,000 & £170,000 of assets & passed this to her sons.Would there be no IHT to pay ?& is there a form they have to complete for HMRC please to transfer nil band rate ?Thanks

[@TheRetirementCafe]

Use the online Inheritance Tax checker www.tax.service.gov.uk/guidance/check-inheritance-tax-due/?_ga=2.152766265.1023066100.1705047761-2076941980.1704792622

[@jasmineblack9778]

@@TheRetirementCafe thanks ,do you know which nil band rate would pass from the late deceased parent to the 2nd deceased parent to then leave house & assets to children.NRB at £325,000 or RNRB at £175,000.So Is it 325000 +175000 or 325000 x 2?

[@kohtime]

Morning Jason, I wonder if you can clarify something for me…. If for example my mother passes her NRB to my father upon death is he then able to pass the entire £650k after his passing or does it revert to his individual NRB? This is something my family have been struggling to understand for some time and we would really appreciate your clarity on the matter. Thanks in advance

[@TheRetirementCafe]

The executors of the deceased person make a claim for any unused portion of a former spouse’s nil rate band, irrespective of when that person died. The amount of nil rate band available for transfer will be based on the proportion of unused nil rate band at the time of death of the first spouse. A maximum 100% of the nil rate band will be available.

[@kohtime]

@@TheRetirementCafe so if they jointly own assets of 500k, 250k will be passed to my father IHTfree? And then he will only be able to pass his 325 + 75 remaining? Leaving 100k subject to IHT at his passing? Is that correct?

[@TheRetirementCafe]

@@kohtime There is no inheritance tax between husband and spouse. If the whole estate of your father passes to your mother she will have inherited his Nil rate Band. At current rates £650k plus possibly 2x Residential Nil Rate bands if the home is being inherited by a direct descendant.

[@sarahphillips712]

Hello, My mother owns a home which is roughly £375k and has left the house to me in a will. Will I be eligible for RNRB if even I currently live with her?

[@TheRetirementCafe]

@@sarahphillips712 Hi Sarah, Your mother's estate should be eligible for the Residential Nil Rate Band though that does depend on the total value of the estate and who are the beneficiaries of her property.

[@ellissmith5520]

My gosh this was unclear ... 🧐🤔

[@richardlongmore9301]

All this financial fuckery is needlessly complicated so you just don’t know what’s going on makes it easier for the government to scamm you. It’s why politicians use there own language

[@Crimsonhaha]

How could it have been any clearer 😂