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Gill Steel uses a practical example to illustrate the operation of the new rules governing downsizing for the inheritance tax residence nil rate band.
KEY POINTS
- The nil rate band applies to lifetime gifts as well as on death.
- The residence nil rate band will apply in estate calculations only .
- Downsizing relief will be available if a home has been sold before death.
- The downsizing addition will depend on six conditions being satisfied.
- The calculation of the lost relievable amount.
The achilles heel
The Readers’ Forum question and replies to ‘Trust in me’ (see Taxation 27 September 2018 page 23) made me think that the downsizing rules for the inheritance tax residence nil rate band (RNRB) really are the achilles heel of advisers. Everyone is bored by the subject matter but the rules are complex and it is easy to overlook how they operate. If tax...
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