Inheritance tax

boatman12

A few years ago I inherited my  Parents home in Devon. I used to live there as a child and up until age 26.  However, I am now and have been for several years living in Dorset, because I look after an ill friend at their rented council house. I use their house as my address.

The council  treats my inherited house as a second home.  I  have many of my posesions there and regularly stay there for short periods, but it has not been my formal home address since I inherited.

I intend to leave my inherited house to my children in my will.

My question is: as far as inheritance tax and the Residence Nil Rate Band (which says the house can be a second home / you must have lived in the house at some time to qualify) is concerned, does it require that my actual address must have been my Devon home for at least a while since I inherited it?

Does anyone know please?

Keep_pedalling

If you are not living there then it is not your residence and the RNRB cannot be claimed. Are you planning to move back there at some time in the future?

bobster2

From IHTM46011 - Basic Definitions: ‘Qualifying Residential Interest’ and ‘Residential Property Interests’

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm46011

"A ‘residential property interest’, means an interest in a dwelling-house which has been the person’s residence at a time when their estate included that, or any other, interest in that dwelling-house. For example, this would include a house owned by the deceased that they had been living in. It could also include an apartment that the deceased lived in previously and still owned, but which was rented out at the date of death."

From..Check if an estate qualifies for the Inheritance Tax residence nil rate band

https://www.gov.uk/guidance/check-if-you-can-get-an-additional-inheritance-tax-threshold#find-out-how-to-qualify-for-residence-nil-rate-band

"Only one home will qualify for the available residence nil rate band. If the person who died owned and lived in more than one home, the executor can choose which one to use. The person that died must have owned and lived in the property at some time. A property that they owned but never lived in, such as a buy-to-let, will not qualify for this allowance."

boatman12

Thank you for your replies.

Does this mean that anyone who has a second home and wants that house to qualify for the RNRB needs to make it their formal address even if only for a short period?

I would like to move into my house but that would mean abandoning the person I look after. 

I still wonder if the definition of "must have lived there at some time" means  it has to have been your formal address.