Transferrable RNRB - technical question
BryceClark22
Member
Hi, been trying to get a definitive answer to this for a while. I would appreciate any help.
- Husband & Wife are married (both second marriage, following divorce, no children together but each has children from previous marriage no RNRB or NRB previously inherited)
- Wife owns their home 100% (value circa £750,000) and the husband has not owned a property since around 2003
- Their wills currently state that on the wife's death, the property passes to her children (i.e. her beneficiaries) but the husband has life rent.
- In this scenario, only the wife has an RNRB that applies to the family home as it is an asset that is 100% in her name and the husband will not have an RNRB as he has not owned a property since 2003 and potentially never will.
My understanding is that he has no RNRB and has never had one:
- He doesn’t own a property currently
- He has not owned one post 2015
- The downsizing rules don’t apply because he again has never owned a property post-2015
- The estate also cannot claim the RNRB on the ‘died before 6 April 2017’ rule (as the husband is still alive and well)
Therefore, he has not qualified for the RNRB, and there is no unused RNRB that the estate can transfer to the wife or claim.
Comments
I'm happy to be corrected here but there is no entitlement to RNRB until you die.
Unlike the NRB, which can be used in lifetime with CLTs, the availability of the RNRB is established on death. And, if there is no qualifying home or other conditions in place that would allow the deceased to use it, it can be claimed by a surviving spouse when they die.
If he predeceases her whilst they are married, then she will be entitled to any RNRB he didn't use.
Hi @benjaminfabi thanks for the response, that would make sense! I think I am struggling to get an answer on what is classed as unused RNRB? Is it, that he didn't qualify for one and therefore unused or is it, that he qualified but didn't have property at the time of death that used the RNRB so consequently there is some to be transferred
@BryceClark22 agree with @benjaminfabi said.
People overthink this a lot. Calm your mind, clear your thoughts and ask yourself one question.
Everyone has an RNRB regardless.
The question is will he use RNRB when he dies?
That would require him to pass a property he owns (or downsized after 7th July 2015) to his direct descendants.
That's not going to happen here, so he won't use his RNRB so full amount is available.
PS If she dies first the home will be in his estate (an IPDI) then pass to this stepchildren so he will get to use 2 x RNRB..
Using our theory above did she pass a property to here descendants and the answer is no - it went into her husbands estate which is spousal exempt.
https://www.mandg.com/wealth/adviser-services/tech-matters/iht-and-estate-planning/nil-rate-bands/residence-nil-rate-band-facts
@les_cameron
Is it correct that his RNRB will still be tapered though? eg if his estate is worth £3m on death then the amount of RNRB is tapered to nil and nothing can be inherited by the spouse?
@les_cameron Thank you for clearing that up, I was unaware RNRB was available regardless, as I thought they had to have a qualifying interest post 2015?
For the example used, is that still the case as on her death the home will not be in his estate. It is to go straight to the children, he will continue to live in it as he has life rent. He will never have an interest in the property.
He has an interest in it he has a right of occupation. The home will be in his estate.
I think the qualifying interest post 2015 you are referring to is for the downsizing adjustment only.