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Hello Sir,
kindly explain the paragraph below regarding the Changes in nil rate band between deaths of spouses/civil partners i dont understand it conpletely.
If the nil rate band increases between the death of B and the death of A, the amount of B’s unused nil
rate band must be scaled up so that it represents the same proportion of the nil rate band at A’s death
as it did at B’s death.
For example, if the nil rate band at B’s death was £300,000 and B had an unused nil rate band of £90,000,
the unused proportion in percentage terms is therefore 90,000/300,000 × 100 = 30%. If A dies when the
nil rate band has increased to £325,000, B’s unused nil rate band is £325,000 × 30% = £97,500 and this
amount is transferred to increase the nil rate band maximum available on A’s death.
The increase in the nil rate band maximum cannot exceed the nil rate band maximum at the date of A’s
death eg if the nil rate band is £325,000, the increase cannot exceed £325,000, giving a total of £650,000
thank youThe examples you give are correct but maybe the language used is a little unclear.
If first spouse dies when nil rate band is £300,000 of which 30% is unused, then this will allow for the available nil rate band at the time of the death of the 2nd spouse to be increased by 30%.
If the nil rate band is therefore £325,000 on the death of the 2nd spouse the available nil rate band to use is computed as:
130% x £325,000 = £422,500Clearly the maximum unused nil rate band would be 100% and hence if the 2nd spouse now dies the max available nil rate band would be 200% x £325,000 = £650,000.
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