Section 8D | Extra nil-rate band on death if interest in home goes to descendants etc ^F1

From legislation.gov.uk

(1)Subsections (2) and (3) apply for the purpose of calculating the amount of the charge to tax under section 4 on a person's death if the person dies on or after 6 April 2017.^F1

(2)If the person's residence nil-rate amount is greater than nil, the portion of VT that does not exceed the person's residence nil-rate amount is charged at the rate of 0%.^F1

(3)References in section 7(1) to the value transferred by the chargeable transfer under section 4 on the person's death are to be read as references to the remainder (if any) of VT.^F1

(4)The person's residence nil-rate amount is calculated in accordance with sections 8E to 8G (and see also section 8M).^F1F2

(5)For the purposes of those sections and this section—^F1

(a)the “residential enhancement” is—^F1

(i)£100,000 for the tax year 2017-18,^F1

(ii)£125,000 for the tax year 2018-19,^F1

(iii)£150,000 for the tax year 2019-20, and^F1

(iv)£175,000 for the tax year 2020-21 and subsequent tax years,^F1

but this is subject to subsections (6) and (7),

(b)the “taper threshold” is £2,000,000 for the tax year 2017-18 and subsequent tax years, but this is subject to subsections (6) and (7),^F1

(c)TT is the taper threshold at the person's death,^F1

(d)E is the value of the person's estate immediately before the person's death,^F1

(e)VT is the value transferred by the chargeable transfer under section 4 on the person's death,^F1

(f)the person's “default allowance” is the total of—^F1

(i)the residential enhancement at the person's death, and^F1

(ii)the person's brought-forward allowance (see section 8G), and^F1

(g)the person's “adjusted allowance” is—^F1

(i)the person's default allowance, less^F1

(ii)the amount given by—^F1

Formula

\frac{E - T T}{2}

but is nil if that amount is greater than the person's default allowance.

(6)Subsection (7) applies if—^F1

(a)the consumer prices index for the month of September in any tax year (“the prior tax year”) is higher than it was for the previous September, and^F1

(b)the prior tax year is the tax year 2020-21 or a later tax year.^F1

(7)Unless Parliament otherwise determines, the amount of each of—^F1

(a)the residential enhancement for the tax year following the prior tax year, and^F1

(b)the taper threshold for that following tax year,^F1

is its amount for the prior tax year increased by the same percentage as the percentage increase in the index and, if the result is not a multiple of £1,000, rounded up to the nearest amount which is such a multiple.

(8)The Treasury must before 6 April 2021 and each subsequent 6 April make an order specifying the amounts that in accordance with subsections (6) and (7) are the residential enhancement and taper threshold for the tax year beginning on that date; and any such order is to be made by statutory instrument.^F1

(9)In this section—^F1F3F4

“consumer prices index” means the all items consumer prices index published by the Statistics Board,