Good morning I just wanted to check that I’ve got this right?
My client sold her home in October 2024 to move into a property held in a Discretionary Trust. So she has no QRI in her current home.
Her interest in the former home (which she shared with a now ex husband) was worth £120K when she sold in October 2024.
So far so good- downsizing addition will be £120K.
Does it matter that she and her then husband left the property in summer 2014 (i.e. before 8th July 2015) and it was rented out until it was finally sold in 2024.
I don’t think it makes a difference but I just want to double check.
S8H(2) defines a residential property interest very broadly. It only has to have been a residence and in the person’s estate at some time in the past. Only the disposal must take place on or after 8 July 2015: subs(4A)(a).
“Disposal” throughout IHTA is not defined but is wider than a sale. Similarly in the pre-asset code and CGT. In s.8HA it has to be a disposal to a person other than P, the context of an actual disposal by the trustees. It therefore has the same meaning as an actual disposal but not a deemed disposal for CGT. It includes a disposal by gift and “person” has a wide meaning.
HMRC take the view where timing is important that, if a contract is involved, completion is the point in time of disposal: IHTM46054.