Inheritance Tax, RNRB & QFRI Question

Hassall001

I hope this is the most appropriate forum topic. My apologies if there is a better one and I've missed it.

Background to my questions below

I have three elderly relatives, they are sisters and are my 1st cousin, once removed. They are all unmarried and have no children. I am their nearest living relative. I have POA for all three sisters and, last year, sold their houses to pay for their Care Home Fees.

Questions

In a recent episode of the current TV series, Martin stated that an individual who moves into a Care Home and was required to sell her home to pay the Care Home Fees would qualify for an additional “up to” £175,000 Inheritance Tax relief in addition to the standard Nil Rate Band of £325,000.

In reading around, was Martin referring to “‘Qualifying Former Residential Interest’ – as described in a section of the gov.uk web site (I’m not allowed to post links) under the heading IHTM46053 - Downsizing: qualifying former residential interest (QFRI).

Their homes were sold after 2015 and would have qualified for RNRB in the event of their death.  As a 1st cousin, once removed would I come under the definition of “direct descendant” as I am unable to find a definition.

Please could you offer some advice to me as to whether my relatives would be eligible for this.  I understand they can not pass on any IHT allowances as they are only sisters.

Many thanks for reading this

Martin

Keep_pedalling

As none of them had any direct descendants then none of their estate quality for the residential NRB. A decent descendent is a child, grand child or great grandchild. If any of them die with over £325k in assets IHT will apply unless they have made charitable bequests in their wills.

RAS

Direct descendants are children, grandchildren and great grand children etc.