Meg Saksida highlights the meaning of ‘closely inherited’ for the purposes of the inheritance tax residence nil rate band.
The Conservative manifesto in 2015 promised that the government would legislate to take the family home out of inheritance tax (IHT) on the death estate, and the residence nil rate band (RNRB) was the answer. The RNRB is a valuable relief, as each individual has up to £175,000 IHT free on their main residence if the conditions are satisfied.
The RNRB relies on the estate including a ‘qualifying residential interest’, which is essentially a residence that the deceased had used as their family home. The qualifying residential interest must also be closely inherited. ‘Closely inherited’ means that there has been a disposition to either a lineal descendant of the deceased, a person who is the spouse or civil partner of a lineal descendant at the time of the deceased
