Hello,
I have an existing range line (not in use) that has a 40 amp breaker and 8 AWG double pole line from the service panel
Can run 2 no 12AWG lines from range outlet box with 2 t'stats and 2 basebrd units (750 and 1200 watts) then downsize the breaker in the service panel to 20 Amp?

Thanks

You can't mix wire sizes in a circuit.. You can pull the 8 out and replace it with # 12. MIs-matching breakers and wiring is also not a good idea... leads to confusion and ultimately incorrect protection on a circuit or device. You need to run new wire and properly protect it and the heaters with the appropriate breaker. Is it your intention to run these heaters on 120 or on 240 volts?

Actually mixing wire sizes is frowned upon, but not at all prohibited.
What you propose is fine, the only thing I would do is label the wires at the panel to avoid future confusion.