IHT Residence Nil Rate Band – ‘downsizing relief’

When the Residence Nil Rate Band (RNRB) was announced in the Summer Budget, it was made plain that there would be a relief where a homeowner who had sold his home and moved to a less valuable one, or had moved into other accommodation and therefore did not own his own home at the time of his death. In these circumstances, the homeowner might only be entitled to a lower RNRB, reflecting the value of the home he was living in at the date of his death, or possibly no RNRB at all if he was, for example, living in a care home. HMRC has now published draft legislation consisting of new ss8A to 8FE IHT Act 1984 (see https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/483628/Draft_Clause_44.pdf).