This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Transfer to Tenants in Common and RNRB

DLThomas
Posts:5
Joined:Thu Aug 04, 2022 12:53 pm
Transfer to Tenants in Common and RNRB

Postby DLThomas » Fri Aug 05, 2022 5:02 pm

In February 2015, my mother transferred her house into the joint names of herself, myself and my sister as tenants in common. This was registered with the Land Registry.

The ‘Deed of Appointment and Declaration of Trust’ stated that the house was held one half by my mother and one half in the nil rate band discretionary trust set up in my father’s will, with the intention that the house provided a home for my mother as long as she wished. She did live there alone until her death in December 2021, i.e. within 7 years of making the transfer.

My sister and I are the surviving trustees of the nil rate band discretionary trust.

For inheritance tax purposes, would the the following statements appear to be true?

We have to report the transferring of the house to us as a gift with reservation of benefit, using 50% of its total value.
We can’t claim RNRB because we already, in effect, own half the value of the house and the other half is held in the trust.

Thank you.

AGoodman
Posts:1453
Joined:Fri May 16, 2014 3:47 pm

Re: Transfer to Tenants in Common and RNRB

Postby AGoodman » Fri Aug 05, 2022 6:28 pm

The key question is whether your mother was the 100% absolute owner of the property when she transferred 50% into trust or did that 50% actually belong to your father's estate. If they owned the property as tenants in common then the 50% was in your father's estate and your mother was not actually making a gift to the NRBT, she was simply facilitating the transfer from the estate to the NRBT. It would not be a GROB at all.

If your mother was the 100% owner (legally and beneficially) but just decided to give 50% to the trust, that's little strange.

You could claim the RNRB on the 50% owned by your mother. It's all about the beneficial ownership, not the legal (registered) ownership.

DLThomas
Posts:5
Joined:Thu Aug 04, 2022 12:53 pm

Re: Transfer to Tenants in Common and RNRB

Postby DLThomas » Fri Aug 05, 2022 8:59 pm

Thank you for your reply, again.

My parents did, in fact, hold the property as tenants in common. My father died in 2010 but it wasn’t until 2014 that it was realised we hadn’t taken notice of the NRB trust clause in his will. Hence the above mentioned deed being drawn up. Unfortunately, as mentioned in my previous post, no other assets were specified as being transferred to the trust at

My sister and I have, I think, been confused by finding we had become tenants in common and had thought this might constitute some form of GROB.


Return to “Inheritance Tax, IHT, Trusts & Estates, Capital Taxes”