Malcolm Finney takes a look at the complex provisions for inheritance tax residence nil rate band purposes.
The inheritance tax (IHT) residence nil rate band (RNRB) provisions were introduced in F(No 2)A 2015, and are applicable to deaths occurring on or after 6 April 2017.
They provide an extra allowance (tax-free band) for offset against a deceased’s estate: £175,000 for the tax year 2020-21 and all subsequent tax years.
Family home and family inheritance
For an RNRB to be available on death, the testator’s interest in their residence (basically, family home) must be ‘closely inherited’. Thus, firstly there must be an inheritance of a residential property interest, and secondly the person inheriting must be closely related to the testator.
‘Inheritance’ means a disposition typically made by
