In the 2015 summer budget the chancellor introduced a new additional rate band, intended to apply where an individual passes their main residence to a direct descendant on death.
Following consultation in late 2015, HMRC issued a policy paper, together with draft clauses for introduction into Finance Bill 2016. This also included draft clauses and proposals in respect of the application of the band in instances where downsizing had occurred or the property had been sold
It has been confirmed in this budget that the government will introduce legislation in Finance Bill 2016 to ensure that the residence nil rate band is also available when a person downsizes or ceases to own a home on or after 8 July 2015, provided assets are passed on death to direct descendants.
It is intended that the residence nil rate band will reduce an individual’s exposure to IHT on death in respect of their interest in a residential property, provided it has been their residence at some point and it passes to a direct descendant on their death. The legislation will also provide relief from IHT in cases where the deceased had downsized or sold their residence after 8 July 2015.se
See our previous article for further details: http://www.gabelletax.com/blog/2016/03/11/the-main-residence-nil-rate-band/