My client is a widower. He has an Estate currently around £1.3m - house £750K, farmland £350K, cash/investments £200K.
My client will be entitled to a Nil Rate Band of £325K and a balance from his late wife of £88K. He will also be entitled to a Residents Nil Rate Band (RNRB) of £350K - his own of £175K and a further £175K from his late wife.
His Will leaves his estate 50/50 to his son and daughter.
He is considering selling his house, and the farmland and buying a new home for £300K. He will gift the resultant total cash (which after costs and CGT would be about £950K) to his children. he is happy that his income is sufficient to provide for him for the remainder of his life.
If he was then to die within a very short time frame, leaving the remainder of his estate to the Children, is it correct that the RNRB would be £350K, rather than the lower £300K reflecting the value of the home he owns at the date of death?
The Downsizing Relief calculation seems to suggest that the lost additional threshold is £50K and that as the estate passes entirely to the children, does that not mean that the RNRB will be £350K.
Any thoughts, clarifications etc would be gratefully received.