»Ê¹ÚÌåÓýapp

Where a person has disposed of a residential property interest (IHTM46011) on or after 8 July 2015 and there is no residential property interest in the estate at death, a downsizing addition (IHTM46050) may be due if certain conditions are met. »Ê¹ÚÌåÓýappre are five conditions that all need to be met, which are set out in IHTA84/S8FB(2) to (6) as conditions G to K. If all these conditions are met a ‘downsizingâ€� addition may apply.

»Ê¹ÚÌåÓýappre is entitlement to a downsizing addition in calculating a person’s residence nil-rate amount if the following conditions are met:

Condition G

»Ê¹ÚÌåÓýapp person’s estate immediately before their death does not include a residential property interest.

Condition H

»Ê¹ÚÌåÓýapp value transferred (VT) (IHTM46012) must be greater than nil.

Condition I

»Ê¹ÚÌåÓýappre is a qualifying former residential interest (IHTM46053) in relation to the person.

This means a ‘residential property interest� in a person’s estate that was disposed of on or after 8 July 2015, and before the date of death.

Condition J

At least some of the estate must be closely inherited (IHTM46013).

Condition K

A claim is made for the addition in accordance with IHTA84/S8L(1) to (3).

This means a claim made by the personal representatives, or other persons liable to the tax chargeable, within 2 years from the end of the month in which the death occurs, or (if it ends later) 3 months beginning with the date on which the personal representatives first started to act. In some circumstances HMRC may allow a late claim.

Where these conditions are met it is necessary to calculate the lost relievable amount (IHTM46062). Essentially this is the amount of RNRB that has been lost by the disposal or downsizing. »Ê¹ÚÌåÓýapp rules for this calculation are set out in IHTA84/S8FE.

»Ê¹ÚÌåÓýapp actual amount of the downsizing addition will be the lower of the lost relievable amount and the value of the ‘remainderâ€� that is closely inherited.