If the client sold their property on or after 8 July 2015, the Residence Nil Rate Band (RNRB) may not necessarily be lost, provided other assets equivalent to the ‘lost’ RNRB are left to direct descendants on death.
The additional allowance will be limited to the lower of the amount of the RNRB, lost as a result of downsizing and the value of the property, or other assets, being inherited by the descendants.
HMRC outline a 5 step approach in calculating additional RNRB and any ‘lost’ additional threshold.
To access the technical note click here.
.