IHT after selling family home to pay for care

[sommerinthecity]

My DDad is in a care home and we (my siblings and I) need to empty and sell his (was my DMums house too but she died a few years ago).

The house might be worth £700k and so I think we would get £650k IHT relief on it if he died before we sold it (unfortunately he never recovered from my DMum death and he's been ill for many years).

But if we sold the house and had the cash in his bank account and he then died, would HMRC want IHT on everything about £325k?

I thought a quick Google would tell me, but it's not easy to find the answer!

If so then we are best renting out the house until his eventual death?
I know this all sounds so heartless, but 2 of my siblings are disabled and it would give them a chance of buying a flat together and having security for the first time. My DDad is in his 90's and been frail for years and just wants to go.

https://www.gov.uk/guidance/how-downsizing-selling-or-gifting-a-home-affects-the-additional-inheritance-tax-threshold

Provided the proceeds of his house are left to children or grandchildren he has a total of £500k nil rate band so there would only be tax to pay on anything above that.

Depending on when your mother died her NRB may have been transferred to him also, making a total of 1 million tax free.

Thanks for the link princess - I'm sorry but I really don't understand it, I always find the HMRC website describes things as clear mud!

1. Did your mum leave everything to your Dad? If so he has his and her nil rate band, so £650k of any assets before IHT is due.
2. Will his estate be more than that?
3. Will his estate be less than £2m?
4. If yes to 2 and 3, will he leave all assets to his direct dependents?
5. If yes to 4, he would probably have his and your mums residential nil rate band available, meaning another £350k on top of the £650k nil rate band at 1.