Section 8E | Residence nil-rate amount: interest in home goes to descendants etc ^F1

From legislation.gov.uk

(1)Subsections (2) to (7) apply if—^F1F2

(a)the person's estate immediately before the person's death includes a qualifying residential interest, and^F1

(b)N% of the interest is closely inherited, where N is a number—^F1

(i)greater than 0, and^F1

(ii)less than or equal to 100,^F1

and in those subsections “NV/100” means N% of so much (if any) of the value transferred by the transfer of value under section 4 on the person’s death as is attributable to the interest.

(2)Where—^F1

(a)E is less than or equal to TT, and^F1

(b)NV/100 is less than the person's default allowance,^F1

the person's residence nil-rate amount is equal to NV/100 and an amount, equal to the difference between NV/100 and the person's default allowance, is available for carry-forward.

(3)Where—^F1

(a)E is less than or equal to TT, and^F1

(b)NV/100 is greater than or equal to the person's default allowance,^F1

the person's residence nil-rate amount is equal to the person's default allowance (and no amount is available for carry-forward).

(4)Where—^F1

(a)E is greater than TT, and^F1

(b)NV/100 is less than the person's adjusted allowance,^F1

the person's residence nil-rate amount is equal to NV/100 and an amount, equal to the difference between NV/100 and the person's adjusted allowance, is available for carry-forward.

(5)Where—^F1

(a)E is greater than TT, and^F1

(b)NV/100 is greater than or equal to the person's adjusted allowance,^F1

the person's residence nil-rate amount is equal to the person's adjusted allowance (and no amount is available for carry-forward).

(6)Subsections (2) to (5) have effect subject to subsection (7) and sections 8FC and 8M(2B) to (2E).^F1F3

(7)Where the person's residence nil-rate amount as calculated under subsections (2) to (5) without applying this subsection is greater than VT—^F1

(a)the person's residence nil-rate amount is equal to VT,^F1F4

(b)where E is less than or equal to TT, an amount, equal to the difference between VT and the person's default allowance, is available for carry-forward, and^F1F4

(c)where E is greater than TT, an amount, equal to the difference between VT and the person's adjusted allowance, is available for carry-forward.^F1F4

(8)See also—^F1F5F6

section 8FC (modifications of this section where there is entitlement to a downsizing addition),

section 8H (meaning of “qualifying residential interest” , “qualifying former residential interest” and “residential property interest”),

section 8J (meaning of “inherit”),

section 8K (meaning of “closely inherited”), and

section 8M (cases involving conditional exemption).