IHTM46060 - Downsizing Calculations: overview
For the downsizing provisions to be in point, there must have been a ‘residential property interest’ (IHTM46011) in a person’s estate on or after 8 July 2015 which has either been disposed of, or downsized from, before the date of death.
The downsizing rules are designed to replace RNRB that has been lost due to the downsizing or disposal. They are not designed to replace RNRB that has been lost because a residential property interest in the estate on death is not closely inherited.
The general approach to determining the downsizing addition (IHTM46050) is to establish:
- the amount of RNRB that has been lost as a result of the disposal – the ‘lost relievable amount’, and
- the value of property (other than any QRI) that is being closely inherited (IHTM46052) on the death.
The downsizing addition is the lower of these two amounts.
There are slightly different rules and slightly different calculations depending on whether: