What happens to RNRB if I want to sell my parents’ property after probate?  

The Residence Nil Rate Band (RNRB) can make a big difference to how much Inheritance Tax (IHT) is paid on an estate. But what happens to RNRB if you want to sell your parents’ property after probate is granted?

In this article, we’ll explain how selling a property affects the RNRB, what the downsizing rules are, and what you need to keep in mind when dealing with HMRC. We’ll keep things clear and simple - no legal jargon here! 

What is the Residence Nil Rate Band (RNRB)? 

Before we dive in: The Residence Nil Rate Band is an additional tax-free allowance for Inheritance Tax. It applies when someone leaves their home to direct descendants, such as children or grandchildren.  

As of the 2024/25 tax year, the RNRB is £175,000 per person. This is on top of the standard Nil Rate Band of £325,000. 

So in total, a person can potentially pass on up to £500,000 tax-free, or £1 million for a couple, if they both qualify and pass on the home to direct descendants. 

Selling the home after probate, does it affect the RNRB? 

The good news is: selling your parents’ property after probate won’t stop the estate from claiming the RNRB, as long as the right conditions are met. 

The key factor is what happened before the sale. If your parent owned a home and left it to direct descendants in their Will, and the property was part of the estate at the time of death, the estate can usually still claim the full RNRB, even if you later sell the house. 

The RNRB is claimed during the probate process. Once it’s applied, it won’t be reversed simply because the property is sold after probate is granted. 

However, if the home was sold before death or wasn’t left to direct descendants, different rules apply, and this is where downsizing rules come in. 

What are the downsizing rules? 

The downsizing rules are designed to make sure people don’t lose the RNRB just because they sold or gave away their home before they died. 

For example, let’s say your mum sold her home and moved into a smaller flat, or a care home. As long as: 

• She left assets of equal value to direct descendants, and
• The home used to be part of her estate

Then the estate can still claim the RNRB, using something called the downsizing addition. 

To qualify for this, the sale or downsizing must have happened after 8 July 2015, and the deceased must have owned a qualifying residence at some point. 

So even if the property was no longer in the estate at death, the estate might still get the RNRB; it just involves a bit more paperwork. 

What conditions does HMRC require? 

To successfully claim the RNRB (or the downsizing addition), HMRC will need: 

• Proof that the home was owned and lived in by the deceased

• That it was passed (or intended to be passed) to direct descendants

• That the value of the home (or other assets) matches the RNRB claimed

If the home is being sold after probate, it’s important that: 

• The property was included in the estate at the time of death

• The estate claimed the RNRB as part of the probate process, and

• The buyer and completion date were after probate was granted

HMRC won’t mind that the house was later sold. Their focus is on how it was handled within the estate and whether the beneficiaries were eligible. 

If you're using the downsizing rules, HMRC will ask for additional information to calculate how much of the RNRB is still available. You’ll need to submit this as part of the IHT400 forms or equivalent, depending on the size of the estate. 

Timing matters: What to watch out for 

While selling the property after probate doesn’t cancel the RNRB, there are a few things to watch out for: 

• Don’t rush the sale before the RNRB is claimed. The RNRB is only locked in once probate is granted and the estate is reported to HMRC.

• Keep good records. You may need to show when the property was owned, who it was left to, and how the proceeds were distributed.

• Make sure the Will is clear. The RNRB only applies if the home (or proceeds of its sale) is passed to direct descendants. If the Will leaves everything to a friend or charity, the RNRB won’t apply. 

So, what happens to RNRB if I want to sell my parents’ property after probate? In most cases, you’re in the clear. The RNRB can still be claimed if the property was part of the estate at death and was passed to children or grandchildren. 

If your parent downsized or sold their home before they died, the downsizing rules may still allow the estate to benefit from the RNRB. 

It’s always worth getting advice if you’re unsure, especially when large sums or multiple beneficiaries are involved. Getting it right can save the estate thousands in Inheritance Tax.