Our dad passed away in 2020, and our mum was the sole beneficiary of his estate. My two sisters and I are the sole beneficiaries of mum’s will. We care for mum in her own home 24/7 as she is almost 94 years old with Alzheimer’s. If we sold mum’s house (we have a lasting power of attorney), along with our own properties and purchased a house in which we could all live under one roof, would mum still be entitled to her own inheritance tax nil-rate band (NRB) and residence nil-rate band (RNRB) and also the transferable RNRB and NRB she inherited from dad, upon her passing?  

Arthur Weller replies:  

Due to the downsizing rules (see HMRC’s Inheritance Tax Manual at IHTM46050 et al.), and due to the transfer of unused RNRB rules (see IHTM46040 et al.), your mother will still be entitled to her own NRB and RNRB, and to the transferable NRB and RNRB she inherited from your father when he died. A claim will need to be made. 

Arthur Weller is just one of the tax advisers available through our Tax Insider consultancy service. He is a Chartered Tax Advisor (CTA) who operates his own tax consultancy, a member of the Chartered Institute of Taxation, and a qualified Certified Accountant. Arthur has now done over 1500 tax consultations!