Q&As

A testator (T) is the sole legal and beneficial owner of a residential property. T resides at the property with A. If T were to grant an option in his Will to A to purchase the property, would that affect the ability of T’s personal representatives to claim the residence nil rate band on T’s death?

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Published on LexisPSL on 12/12/2017

The following Private Client Q&A provides comprehensive and up to date legal information covering:

  • A testator (T) is the sole legal and beneficial owner of a residential property. T resides at the property with A. If T were to grant an option in his Will to A to purchase the property, would that affect the ability of T’s personal representatives to claim the residence nil rate band on T’s death?
  • Testamentary options

For the purposes of this response, we have assumed that, the issue of the option aside, T’s estate would be able to claim the residence nil rate band (RNRB) in respect of the property.

General information about the RNRB can be found in Practice Note: IHT—residence nil rate band.

In IHTM46033, HMRC set out their views on the meaning of ‘closely inherited’. They specifically state:

‘The actual residence does not have to end up in the hands of the deceased’s direct descendants. An estate could still be eligible for the RNRB if the deceased’s pers

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