SCHEDULES
SCHEDULE 15Inheritance tax: increased nil-rate band
7
1
Section 8H (meaning of “qualifying residential interest”) is amended as follows.
2
In the heading, at the end insert “, “
qualifying former residential interest
”
and “residential property interest” ”.
3
In subsection (1), for “and 8F” substitute “
to 8FE and section 8M
”
.
4
In subsection (2), for “In this section” substitute “
A
”
.
5
After subsection (4) insert—
4A
Subsection (4B) or (4C) applies where—
a
a person disposes of a residential property interest in a dwelling-house on or after 8 July 2015 (and before the person dies), and
b
the person's personal representatives nominate—
i
where there is only one such dwelling-house, that dwelling-house, or
ii
where there are two or more such dwelling-houses, one (and only one) of those dwelling-houses.
4B
Where—
a
the person—
i
disposes of a residential property interest in the nominated dwelling-house at a post-occupation time, or
ii
disposes of two or more residential property interests in the nominated dwelling-house at the same post-occupation time or at post-occupation times on the same day, and
b
the person does not otherwise dispose of residential property interests in the nominated dwelling-house at post-occupation times,
the interest disposed of is, or the interests disposed of are, a qualifying former residential interest in relation to the person.
4C
Where—
a
the person disposes of residential property interests in the nominated dwelling-house at post-occupation times on two or more days, and
b
the person's personal representatives nominate one (and only one) of those days,
the interest or interests disposed of at post-occupation times on the nominated day is or are a qualifying former residential interest in relation to the person.
4D
For the purposes of subsections (4A) to (4C)—
a
a person is to be treated as not disposing of a residential property interest in a dwelling-house where the person disposes of an interest in the dwelling-house by way of gift and the interest is, in relation to the gift and the donor, property subject to a reservation within the meaning of section 102 of the Finance Act 1986 (gifts with reservation), and
b
a person is to be treated as disposing of a residential property interest in a dwelling-house if the person is treated as making a potentially exempt transfer of the interest as a result of the operation of section 102(4) of that Act (property ceasing to be subject to a reservation).
4E
Where—
a
a transfer of value by a person is a conditionally exempt transfer of a residential property interest, and
b
at the time of the person's death, no chargeable event has occurred with respect to that interest,
that interest may not be, or be included in, a qualifying former residential interest in relation to the person.
4F
In subsections (4B) and (4C) “post-occupation time” means a time—
a
on or after 8 July 2015,
b
after the nominated dwelling-house first became the person's residence, and
c
before the person dies.
4G
For the purposes of subsections (4A) to (4C), if the disposal is under a contract which is completed by a conveyance, the disposal occurs at the time when the interest is conveyed.