Inheritance Tax Act 1984 section 8J

Meaning of "inherited"

Section 8J defines when a person is treated as having "inherited" property from someone who has died, for the purposes of claiming the residence nil-rate band.

• A person inherits property if it passes to them under the deceased's will, the intestacy rules, or by any other means — unless the property enters a trust on death or was already held in a qualifying trust before death.
• Where property enters a trust on the deceased's death, the beneficiary is treated as inheriting it only if they receive an immediate post-death interest, a disabled person's interest, or the property is held in a bereaved minor's trust or an age 18-to-25 trust for their benefit.
• Where property was already in a trust in which the deceased had a qualifying interest in possession, the beneficiary inherits it if they become beneficially entitled to the property on the deceased's death.
• Where property is treated as part of the deceased's estate under the gift with reservation rules, the person who originally received the gift is treated as inheriting the property.