I should be grateful for some help with a question I have on how to express the use of RNRB for an excepted estate.
My mother passed away in January 2022 and I will be applying for probate under the new rules.
There will be no IHT to pay and it appears to meet the conditions for a “low value excepted estate” (IHTM06011/12).
The gross value of the estate is under £650,000, including a house worth £300,000, which has been left to me.
My father pre-deceased my mother and the unused proportion of his NRB equates to £160,000 (allowable now for an excepted estate under IHTM06024 and claimable directly on Probate form PA1 (IHTM06031)).
Total NRB reliefs therefore equate to £325000 + £160,000 = £485,000.
However, as the house is being left to a direct descendent, RNRB of £175,000 applies, giving total available relief of £485,000 + £175,000 = £660,000. The estate gross value is well within this sum and transferring a brought-forward RNRB allowance from my father is not required.
I have used the HMRC inheritance Tax Checker tool which states that IHT is payable as it does not account for RNRB, but it does indicate that I could “claim additional threshold up to £175,000 under residence nil rate band rules.”
There is no box on PA1 to specifically claim RNRB and, in fact, IHTM46004 states that “there is no requirement for a claim to be made for RNRB. If the conditions are in point, then it is due automatically”.
However, historically, RNRB would have been claimed on IHT435, but this requires the completion of forms IHT400 and others, which makes little sense as no IHT is due and I believe that the new rules are meant to reduce the number of estates required to submit IHT submissions (indeed IHT205 is now specific in saying that it should not be used post 1st January 2022).
Firstly, if I have misinterpreted anything above, please correct me.
Secondly, does RNRB need to be claimed on any IHT form?
Lastly, if I do not need to claim RNRB in this way, is there somewhere I need to express it on PA1 anyway, and, if so, how? (If I used the outputs from the IHT checker (as PA1 instructs) then this would be patently wrong as it suggests that IHT is due).
As many estates must fall into this excepted category with property left to descendants, it would be helpful if there were some specific guidance on this.
Many thanks in advance.