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Where Taxpayers and Advisers Meet

Help on understanding failed PETs and the RNRB

Posts: 3
Joined: Tue Feb 02, 2016 8:51 pm

Help on understanding failed PETs and the RNRB

Postby coopster » Wed Jun 13, 2018 8:28 pm

Based on the following scenario, could someone give me their view on whether my conclusions are correct for an unmarried individual:
Gift of £20,000 made to grandchildren in February 2010
Home sold for £400,000 in September 2015 (i.e. after RNRB rules become active). Moves into care home.
Further gift of £100,000 made to same grandchildren in October 2015
Current remaining savings of £340,000

If the individual died today and the estate is left to grandchildren would the calculation be:
Failed PETs = £100,000 (Feb 2010 PET is successful as over 7 years passed although does the second gift reset the 7 year clock?)
Savings = £340,000
Estate on Death = £440,000
Less basic threshold = - £325,000
Remaining value = £115,000
Less additional RNRB threshold = - £100,000 (claiming downsizing addition)
Amount that Inheritance Tax is due on = £15,000

Many thanks in advance for any help.

Lee Young
Posts: 2655
Joined: Wed Aug 06, 2008 3:26 pm

Re: Help on understanding failed PETs and the RNRB

Postby Lee Young » Tue Jun 19, 2018 9:15 am

The RNRB should be available in full, depending on who the estate goes to.

The RNRB is now £125,000
Lee Young
Solicitor, Chartered Tax Adviser and Trust and Estate Practitioner

Partner, Frettens LLP
01202 491701

Posts: 7450
Joined: Wed Aug 06, 2008 3:25 pm

Re: Help on understanding failed PETs and the RNRB

Postby maths » Wed Jun 20, 2018 5:13 pm

As Lee indicates RNRB available if £125k of deceased's estate inherited by issue of the deceased (eg. children, g'children).

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