Mark McLaughlin looks at when a qualifying property is ‘inherited’ and ‘closely inherited’ for inheritance tax residence nil rate band purposes.
The family home is the most valuable asset in the death estates of many individuals and could trap some homeowners in the inheritance tax (IHT) net.
Thankfully, a claim for the residence nil rate band (RNRB) is potentially available where the family home is ‘closely inherited’ (IHTA 1984, ss 8D-8M). The RNRB (£175,000 for 2021/22) is available to each joint owner (most commonly spouses or civil partners).
What does ‘inherited’ and ‘closely inherited’ mean in this context?
A person inherits the property for RNRB purposes if there is a disposition of