In this week’s Q&A, Andy Gilderdale, advisor at Croner VIP Tax Team, considers inheritance tax implications of residence nil rate band (RNRB) where non-resident UK couple living in Spain plan to leave property in trust to daughter
Q. Does residence nil rate band (RNRB) apply to the estate of either husband or wife (neither individual has yet died)? My clients are a couple living in Spain where they have been since October 2015. The UK property that had been their main residence while they were living here, is worth £1m. The property will be left in trust for their only daughter upon their death and their main residence, now in Spain, will also be left to her.
My understanding is that the couple are no longer long-term UK resident as they will have been outside the UK for more than 10 years, and so will only be subject to UK inheritance tax (IHT) on their UK assets. If the UK property was not being left in trust upon their death and left straight to their daughter, would the RNRB apply?
