RNBR question

[SallyR]

I have searched for an answer to this and seem to come up with conflicting answers.

My 92 year old mother has moved out of her £400k home to live with me, her total estate has a total value of £1.9M comprising mostly of rental properties which will be divided equally between myself and my brother on her death.

If she were to sell her home now, will she loose entitlement to RNRB on her death, if she doesn't lose entitlement is the allowance based on that when her home is sold, currently £125k, or that on her death.

Thanks

[AnthonyR]

It's particularly messy, but assuming she doesn't own a home at the date of her death, it's based on the value of the property at the date of downsizing (or selling) which gives you a percentage of the allowance available to use.

So if the property is worth £125k now and the allowance is £125k now then if she sells it this tax year she will have 100% of whatever the RNRB is at the date of her death (assuming at least £125k is closely inherited by descendants). In April the RNRB rises to £150k so if she sells it on 6th April this year for £125,000 she will have £125/150=83.3% of whatever the RNRB is at the date of her death. So if she dies at a future point in time when the RNRB is £200,000 she'll be entitled to £200k * 83.3% = £166,667. This is, again assuming she leaves at least that amount to children/grandchildren etc. It also assumes her estate remains below the taper threshold (currently £2m).

Don't get me started on how complex it is if she simply downsized to a smaller property....