My mother is now 94 and still Iives in the same house that was bought by my late father in 1947. I also lived in this house from my birth in 1954 until I married and moved out in 1980. Can I claim any inheritance tax (IHT) relief as it was my only residence for 26 years? Also, as myself and my daughter are the only surviving relatives, how can we mitigate the IHT bill?
Arthur Weller replies:
Unfortunately, the period you lived in the house, from 1954 until 1980, doesn't count, because the house didn't belong to you then. However quite possibly there may be not much, or even no IHT to be paid when your mother passes away. This is because maybe your mother inherited the IHT ‘nil rate band’ from your father when he died, if he left everything to your mother. Additionally, there are ‘residence nil rate band’ rules increasing the IHT nil rate band when the asset passing on death to the descendants of the deceased is the house that the deceased lived in.
This question was first printed in Tax Insider in May 2018.