Option to purchase property and the RNRB

Has there been any indication as to whether an option to purchase property (in favour of an unmarried partner) with proceeds passing to direct descendants will qualify for the RNRB?

Logic says that as direct descendants receive the proceeds of sale from a qualifying property, the gift would still satisfy the requirements. Any thoughts?

Rachel Sugden
Willans LLP

There is nothing in the manuals that specifically confirms the result in the situation you refer to, but the following (at IHTM 46033) comes pretty close: “The actual residence does not have to end up in the hands of the deceased’s direct descendants. An estate could still be eligible for the RNRB if the deceased’s personal representatives sell the residence as part of the administration of the estate and pass the sale proceeds to the direct descendants.”

Paul Davies
DWF LLP

Thanks Paul,

My concern was that it would amount to something akin to the loss of BPR where there is a binding contract for sale to the surviving shareholders at the date of death. But: “Equally a gift in the deceased’s will directing the personal representatives to sell the deceased’s residence with the sale proceeds being paid to a direct descendant would be treated as the residence being closely inherited” (IHTM 46033) seems to sum it up.

Thanks

Rachel Sugden
Willans LLP