Status of family home

[limoges]

Our elderly parents have resided with us in our home for several years. Sadly they have decided to live apart but not divorce. My mother will continue to reside with us but my father will move into a buy to let that they have owned jointly for many years, but have never lived in.
They sold their primary home when they moved in with us and currently do not have a primary home.

What will be the status of my father’s residence when he moves in?
Will it become their primary home despite the fact that our mother will not reside with our father

Our parents are comfortably off and the value of my father’s new residence would help mitigate their eventual IHT liability if it can be recognised as their primary home and thereby benefit from the new IHT allowance on primary homes left to children or grandchildren.

[maths]

If mother/father are in effect separating then the BTL in which father moves will probably become his sole residence; not mother's.

On death, if father leaves his 50% to children the the new Residence Nil Rate Band (RNRB) for IHT will be available. However, the BTL (as mother won't live in it) will not be her residence, and hence if she leaves her 50% to the children the RNRB won't apply in her case.

Any lifetime sale of the BTL will subject mother to a CGT charge.

Depending upon the state of the parting it might be sensible to see at least from a tax perspective if some agreed planning could be done.