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Chapter ihtm46043

Document Cited authorities 1 Cited in Related
Vincent
Published date20 March 2016
Record Numberihtm46043
CourtHM Revenue & Customs
IssuerHM Revenue & Customs

IHTM46041 explains how the brought-forward allowance (IHTM46040) is calculated and how it increases the residence nil-rate band (RNRB) that is potentially available to the estate of the surviving spouse or civil partner. However this increased RNRB can only be used on the survivor’s estate to the extent that there is a qualifying residential interest (QRI) (IHTM46011) which is closely inherited (IHTM46013). The brought-forward allowance is not simply an addition to the RNRB that is due. The examples below show how the brought-forward allowance affects the total RNRB available to an estate.

Example 1

David died in August 2015 with an estate valued at £500,000, which he left to his civil partner, Daniel.

Daniel died in December 2018 when the residential enhancement (IHTM46022) was £125,000. Daniel left an estate of £800,000 including a house worth £400,000. He left the whole of his estate to his children.

The unused RNRB in David’s estate is treated as being £100,000 in accordance with IHTA84/S8G(4)(a) because his death was before 6 April 2017. This is 100% of the residential enhancement that is treated as being available at his date of death in accordance with IHTA84/S8G(4)(b). Daniel’s estate is entitled to claim a brought-forward allowance of 100% of the residential enhancement at Daniel’s date of death, which is £125,000.

This brought-forward allowance (£125,000) is added to the residential enhancement available on Daniel’s death (£125,000) to give...

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