Q&As

Would the residence nil rate band be available where a residential property interest is left on trust for the deceased’s unmarried partner for life with the remainder to the deceased’s children?

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Published on LexisPSL on 14/08/2017

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

  • Would the residence nil rate band be available where a residential property interest is left on trust for the deceased’s unmarried partner for life with the remainder to the deceased’s children?
  • Qualifying residential interest
  • Closely inherited
  • Inherited

Would the residence nil rate band be available where a residential property interest is left on trust for the deceased’s unmarried partner for life with the remainder to the deceased’s children?

The residence nil rate band (RNRB) is an addition to the basic nil rate band (NRB), which further reduces the inheritance tax (IHT) payable on death. It is applied to the taxable value of the estate, but differs from the basic NRB in that it is restricted to:

  1. the value of a residential property interest

  2. the estate on death, and

  3. the inheritance of lineal descendants

Qualifying residential interest

The RNRB is set against the value of a residential interest passing to qualifying beneficiaries. The main condition is that the deceased must have had an interest in a property which was occupied as that person's residence when they owned it and which would have been part of their estate (section 8H(2)–(3) of the Inheritance Tax Act 1984 (IHTA 1984)).

Closely inherited

'Closely inherited' is defined as inherited by a lineal descendant, that is a child, grandchild and remoter issue. Beneficiaries may also include the widow, widower or surviving civil partner of a lineal descendant provided they have not remarried (IHTA 1984, s 8K). Lineal descendant is taken to include an adopted child, step-child, foster child, or ward in cases where a person has been appointed as guardian. Lineal descendants

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