Inheritance Tax Act 1984 section 8HA

"Qualifying former residential interest": interests in possession

Section 8HA sets out how interests in possession in settled property that includes a dwelling-house can count as a qualifying former residential interest for the purposes of the residence nil-rate band.

• Where a person (P) holds a qualifying interest in possession in a trust that includes a dwelling-house, certain disposals of that property can be treated as disposals by P personally
• If the trustees sell or transfer the dwelling-house interest to someone other than P, this is treated as though P personally disposed of the property
• If P gives up or loses their interest in possession while the dwelling-house is still in the trust, this is also treated as a personal disposal by P of the dwelling-house interest
• The interest in possession must be a qualifying type: either one that arose before 22 March 2006, or one arising on or after that date that is an immediate post-death interest, a disabled person's interest, or a transitional serial interest