# Inheritance Tax Act 1984, Section 8E: Residence nil-rate amount: interest in home goes to descendants etc

Extent: E+W+S+N.I.

(1) Subsections (2) to (7) apply if—
(a) the person's estate immediately before the person's death includes a qualifying residential interest, and
(b) N% of the interest is closely inherited, where N is a number—
(i) greater than 0, and
(ii) less than or equal to 100,
and in those subsections “NV/100” means N% of so much (if any) of the value transferred by the transfer of value under section 4 on the person’s death as is attributable to the interest.
(2) Where—
(a) E is less than or equal to TT, and
(b) NV/100 is less than the person's default allowance,
the person's residence nil-rate amount is equal to NV/100 and an amount, equal to the difference between NV/100 and the person's default allowance, is available for carry-forward.
(3) Where—
(a) E is less than or equal to TT, and
(b) NV/100 is greater than or equal to the person's default allowance,
the person's residence nil-rate amount is equal to the person's default allowance (and no amount is available for carry-forward).
(4) Where—
(a) E is greater than TT, and
(b) NV/100 is less than the person's adjusted allowance,
the person's residence nil-rate amount is equal to NV/100 and an amount, equal to the difference between NV/100 and the person's adjusted allowance, is available for carry-forward.
(5) Where—
(a) E is greater than TT, and
(b) NV/100 is greater than or equal to the person's adjusted allowance,
the person's residence nil-rate amount is equal to the person's adjusted allowance (and no amount is available for carry-forward).
(6) Subsections (2) to (5) have effect subject to subsection (7) and sections 8FC and 8M(2B) to (2E).
(7) Where the person's residence nil-rate amount as calculated under subsections (2) to (5) without applying this subsection is greater than VT—
(a) the person's residence nil-rate amount is equal to VT,
(b) where E is less than or equal to TT, an amount, equal to the difference between VT and the person's default allowance, is available for carry-forward, and
(c) where E is greater than TT, an amount, equal to the difference between VT and the person's adjusted allowance, is available for carry-forward.
(8) See also—
section 8FC (modifications of this section where there is entitlement to a downsizing addition),
section 8H (meaning of “qualifying residential interest” , “qualifying former residential interest” and “residential property interest”),
section 8J (meaning of “inherit”),
section 8K (meaning of “closely inherited”), and
section 8M (cases involving conditional exemption).

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Source: https://www.legislation.gov.uk/ukpga/1984/51/section/8E (the official version)
Page: https://openlegislation.uk/inheritance-tax-act-1984/section-8E
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.