Inheritance Tax on lifetime transfers and transfers on death...

Learning Outcomes

This article explains Inheritance Tax (IHT) on lifetime transfers and transfers on death with a particular focus on the Residential Nil Rate Band (RNRB), including:

• The core statutory framework for the RNRB and how it supplements, rather than replaces, the standard nil rate band (NRB)
• Detailed eligibility conditions and typical exam triggers for claiming the RNRB
• Step-by-step calculation of the available RNRB, including caps, tapering for estates above £2 million, and the downsizing addition
• Distinguishing qualifying residential interests from non-qualifying investment property and fractional interests subject to valuation discounts
• The meaning of property being “closely inherited”, including the role of IPDIs, bereaved minors’ trusts, 18–25 trusts, and common non-qualifying discretionary structures
• Selection issues where more than one qualifying residence is owned, and pro‑rata allocation where residue is shared between lineal and non‑lineal beneficiaries
• Transferability of unused RNRB and NRB between spouses/civil partners by percentage and the combined effect of taper on these allowances
• The ordering of reliefs in computing IHT, and how business/agricultural property relief and charity legacies interact with, but do not reduce, the estate value used for tapering
• Application of these rules to SQE1-style problem questions involving complex estates, multiple reliefs, and strategic will‑planning or deed‑of‑variation solutions

SQE1 Syllabus

For SQE1, you are required to understand the practical application of IHT rules to both lifetime gifts and death estates, especially where a residence is involved, with a focus on the following syllabus points:

• the distinction between potentially exempt transfers (PETs), chargeable lifetime transfers (CLTs), and exempt transfers
• the calculation and application of the standard nil rate band (NRB) and the residential nil rate band (RNRB)
• eligibility criteria for the RNRB, including the meaning of "qualifying residential interest" and "direct descendants"
• the tapering of the RNRB for estates exceeding the threshold
• the transferability of unused RNRB between spouses/civil partners
• the downsizing addition and its calculation
• the order of applying reliefs and the impact of other reliefs (e.g., business property relief) on the RNRB
• how to approach SQE1 questions involving complex estates with multiple reliefs and thresholds
• the trust routes that qualify for “closely inherited” treatment (e.g., IPDI trusts for lineal descendants, bereaved minors trusts, and 18–25 trusts) versus those that do not (e.g., discretionary trusts without qualifying status)
• selection issues when there is more than one qualifying residential interest, including pro-rata outcomes where residue is split between lineal and non-lineal beneficiaries
• how the RNRB interacts with the charity reduced rate and why RNRB is ignored in calculating the 10% baseline amount for the 36% rate

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. What is the maximum residential nil rate band (RNRB) available for an individual in the current tax year, and under what conditions can it be claimed?
2. How does the RNRB taper for estates exceeding the £2 million threshold?
3. What is the effect of downsizing on the RNRB, and how is the downsizing addition calculated?
4. Can the RNRB be transferred between spouses or civil partners? If so, how is the transferred amount determined?

Introduction

Inheritance Tax (IHT) is charged on the value of a person's estate at death and, in some cases, on gifts made during their lifetime. The standard nil rate band (NRB) and the residential nil rate band (RNRB) are two key allowances that can reduce or eliminate IHT liability. The RNRB, in particular, is a complex area that often features in SQE1 assessments, especially where estates include a home passing to children or grandchildren. This article explains the rules for IHT on lifetime transfers and on death, focusing on the RNRB, its eligibility criteria, calculation, tapering, transferability, and the downsizing addition. It also clarifies how business and agricultural reliefs interact with RNRB, how “closely inherited” works in practice (including via certain trusts), how to approach estates with multiple residences, and how RNRB sits alongside the charity reduced rate.

IHT on Lifetime Transfers and Death

IHT may arise in three main situations:

• On death, when the value of the estate is assessed
• On certain gifts made during lifetime (lifetime transfers)
• On failed potentially exempt transfers (PETs) if the donor dies within seven years

On death, the general rate is 40% on the chargeable estate above the available nil rate bands. Where at least 10% of the baseline amount is left to charity, the death rate is reduced to 36%. For lifetime transfers, a CLT above the available NRB is taxed at 20% if paid by trustees (25% if paid by the donor), and may attract further tax if the donor dies within seven years. IHT is cumulative: for any transfer, you must look back seven years for prior chargeable transfers, as earlier transfers use up the NRB first. PETs are exempt when made, but become chargeable at death if the donor dies within seven years. Taper relief applies only to lifetime transfers (not to the death estate): if death occurs more than three years after the transfer, the lifetime transfer’s death charge is reduced according to the length of survival.

Key Term: potentially exempt transfer (PET)
A lifetime gift to an individual that is exempt from IHT if the donor survives seven years, but becomes chargeable if the donor dies within that period.

Key Term: chargeable lifetime transfer (CLT)
A lifetime gift (usually to a trust or company) that is immediately chargeable to IHT, often at a reduced rate, with further tax if the donor dies within seven years.

Key Term: nil rate band (NRB)
The threshold up to which an estate or lifetime transfer is not subject to IHT. The NRB is currently £325,000 per person.

Key Term: residential nil rate band (RNRB)
An additional IHT allowance available when a qualifying residence is left to direct descendants. The RNRB is currently £175,000 per person.

The Residential Nil Rate Band (RNRB)

The RNRB is designed to reduce IHT for estates that include a home passing to children or other direct descendants. It is available in addition to the standard NRB.

Eligibility for the RNRB

The RNRB is only available if all of the following are satisfied:

• The deceased owned a "qualifying residential interest" at death (i.e., a property that was their residence at some point)
• The property (or a share in it) is "closely inherited" by direct descendants (children, grandchildren, stepchildren, adopted children, children in out-of-home care, children for whom the deceased was a guardian, or their spouses/civil partners, and certain surviving spouses/civil partners of predeceased descendants who have not remarried)
• The net value of the estate does not exceed the taper threshold (£2 million), or the RNRB (including any transferred amount) is reduced according to the taper mechanism

A qualifying residential interest is an interest in a dwelling that was, at some time during the period of ownership, occupied by the deceased as a residence. The dwelling can be in the UK or overseas. It need not be the deceased’s main residence; a holiday home can qualify if used as a residence. Investment-only property (e.g., long-term buy-to-let never occupied by the deceased) does not qualify. The residence includes land occupied and enjoyed with it as garden or grounds (other than woodland subject to a deferral election). In practice, factual occupation matters: temporary “camping out” is insufficient; permanence and continuity relative to the circumstances are key.

“Closely inherited” covers outright inheritance by lineal descendants and certain trusts for their benefit. RNRB can apply where a qualifying residential interest passes:

• outright to a lineal descendant
• under an immediate post-death interest (IPDI) in favour of a lineal descendant
• to a bereaved minors trust (IHTA 1984 s.71A) or an 18–25 trust (s.71D) for a lineal descendant
• to the current spouse/civil partner of a lineal descendant, or to the widow/widower/surviving civil partner of a predeceased lineal descendant who has not remarried or entered a new civil partnership prior to the death

A discretionary trust that does not fall within the qualifying categories generally will not secure RNRB. If residue is gifted and shared between lineal descendants and non-lineal beneficiaries, the value of the residence is treated as inherited pro-rata; RNRB is then available to the extent attributable to the lineal descendants’ share.

Where the deceased owned more than one qualifying residential interest, the personal representatives may select the one against which the RNRB is claimed (sensible to choose the most valuable within the cap).

Key Term: qualifying residential interest
A property (or share) that was the deceased's residence at some time during their ownership.

Key Term: direct descendant
A child, grandchild, stepchild, adopted child, child in out-of-home care, or the spouse/civil partner of any of these, including certain surviving spouses/civil partners of predeceased descendants who have not remarried.

Amount of the RNRB

The maximum RNRB is currently £175,000 per person. It is capped at the net value of the deceased's interest in the residence (after deducting a mortgage or other liability secured on that property). If only a share of a property is owned, the cap applies to the value of that share. HMRC valuation practices may reduce the value of a fractional interest (e.g., a co-ownership discount for a part interest in land is commonly 15% for residential property, though not for interests co-owned with a spouse/civil partner), which in turn can reduce the RNRB cap for that share.

The RNRB applies as a slice taxed at 0% ahead of the NRB, but only to the extent there is a qualifying residential interest “closely inherited.” It is limited to one property, even if more than one residential property is in the estate.

Tapering of the RNRB

If the net value of the estate exceeds £2 million, the RNRB (including any transferred RNRB and any downsizing addition) is reduced by £1 for every £2 over the threshold. This tapering uses the estate value before deducting business property relief (BPR) or agricultural property relief (APR) and before exemptions such as the spouse or charity exemption. Debts and funeral expenses are deducted, and then the taper calculation is applied to the estate value prior to reliefs/exemptions.

For a single RNRB, it is fully tapered away at £2.35 million (£175,000 × 2 = £350,000 reduction required; £2 million + £350,000 × 2 = £2.35 million). Where full transferable RNRB of 100% is available, the combined allowance is up to £350,000, and tapering can reduce this to nil at £2.7 million (£350,000 × 2 = £700,000 over the threshold).

Transferability of the RNRB

If a person dies without using all of their RNRB (e.g., because their estate passes to a spouse), the unused percentage can be transferred to the surviving spouse or civil partner. Transferability is determined as a percentage of the RNRB unused by the first spouse/civil partner to die, and this percentage uplifts the RNRB in force at the survivor’s death, even if the first death occurred before the introduction of the RNRB. The total RNRB for the survivor’s estate is the sum of their own RNRB and the transferred RNRB, subject to the property cap and any tapering applied to the combined figure.

Downsizing Addition

If the deceased sold or downsized their home after 8 July 2015 and left assets to direct descendants, the estate can claim a "downsizing addition" to preserve the RNRB. This can apply where the residence was sold or replaced with a cheaper property, or where no property was owned at death. Broadly, the downsizing addition equals the lower of:

• the RNRB lost due to downsizing/sale (including any transferred RNRB)
• the value of assets left to direct descendants (other than the residence), or the part of any cheaper replacement residence not covered by the default RNRB

The downsizing addition calculation is proportionate where only part of the residence or part of the estate passes to lineal descendants. The key is to identify what RNRB would have applied had the earlier, more valuable residence been left to direct descendants, then measure the loss at death, and finally cap the addition by the value actually passing to those descendants.

Order of Applying Reliefs

When calculating IHT, apply business property relief (BPR) and agricultural property relief (APR) before the NRB and RNRB. However, for RNRB tapering, the estate value is assessed before deducting BPR or APR and before exemptions such as spouse/charity exemptions. In the overall calculation, the RNRB (including any downsizing addition) is applied first as a 0% slice to the qualifying residential interest value; next, the NRB is applied as a 0% slice to remaining chargeable transfers; remaining chargeable value is taxed at the appropriate rate (normally 40%, or 36% if the charity 10% test is satisfied). Note: the RNRB is ignored when calculating the charity baseline amount for the 10% reduced-rate test.

Worked Example 1.1

Scenario:
Amira dies in 2023, leaving an estate worth £2.3 million, including a home valued at £600,000. She leaves the home to her son and the rest to her daughter. Amira's husband died previously, leaving his entire estate to Amira.

Question:
How much RNRB is available for Amira's estate?

Answer:
The estate exceeds the £2 million threshold by £300,000. The taper reduces the combined RNRB by £1 per £2 over the threshold: £300,000 ÷ 2 = £150,000.
The default RNRB is £175,000. Amira can also claim her late husband's unused RNRB (100%), so the combined starting RNRB is £175,000 + £175,000 = £350,000.
Apply taper to the combined amount: £350,000 - £150,000 = £200,000, capped by the value of the home (which is £600,000).
The estate can apply £200,000 RNRB.

Worked Example 1.2

Scenario:
James sold his home in 2018 for £400,000 and moved into rented accommodation. He left £200,000 of the sale proceeds to his daughter and the rest of his estate to charity. He dies in 2023.

Question:
Can James's estate claim the RNRB?

Answer:
Yes, the estate can claim a downsizing addition. The maximum RNRB is £175,000. The downsizing addition is the lower of £175,000 (the RNRB lost) and £200,000 (assets left to a direct descendant). The estate can claim the full £175,000 RNRB.

Exam Warning

For SQE1, always check the value of the estate before reliefs and exemptions when assessing RNRB tapering. Do not deduct business or agricultural reliefs, spouse exemption, or charity exemption before applying the taper. Ensure the residence is “closely inherited” (outright or via a qualifying trust) and remember that a discretionary trust that does not fall within the qualifying categories will not secure the RNRB.

Revision Tip

When answering SQE1 questions, always identify:

• Whether the estate includes a qualifying residence
• Who inherits the property and whether the route qualifies as “closely inherited”
• The net value of the estate for tapering (before reliefs/exemptions)
• Whether any unused RNRB can be claimed (as a percentage) from a predeceased spouse/civil partner
• Whether a downsizing addition is available (after 8 July 2015), and what value passes to lineal descendants

Interaction with Other Reliefs

The RNRB is applied after business property relief and agricultural property relief. However, for the purposes of tapering, the gross estate value is used before these reliefs and before exemptions. This means high-value estates with significant BPR/APR may still lose some or all of the RNRB due to tapering, even though BPR/APR may remove much of the actual taxable value.

Worked Example 1.3

Scenario:
Priya's estate is worth £2.4 million, including a business worth £600,000 (qualifying for 100% BPR) and a home worth £800,000. She leaves the home to her children and the business to her nephew.

Question:
How much RNRB is available?

Answer:
The gross estate is £2.4 million. The excess over £2 million is £400,000, so the RNRB is reduced by £200,000.
The maximum RNRB is £175,000, so the RNRB is fully tapered away (£175,000 - £200,000 = £0).
No RNRB is available, even though the business property is relieved from IHT.

Downsizing and the RNRB

If a person downsizes or sells their home after 8 July 2015 and leaves assets to direct descendants, the estate can claim a downsizing addition. The calculation operates in stages:

• Identify the notional RNRB that would have applied had the former, more valuable residence been left to lineal descendants (including any transferred RNRB).
• Identify how much default RNRB actually applies at death (for any replacement residence left to lineal descendants).
• The “lost RNRB” is the notional amount minus the default applied at death.
• The downsizing addition equals the lower of the lost RNRB and the value of assets left to direct descendants that are not already covered by the default RNRB (including any attributable share of residue).

Proportionality matters. If only part of the estate goes to lineal descendants, the downsizing addition is constrained by the value of what they receive.

Worked Example 1.4

Scenario:
Leila sold a former residence worth £500,000 in 2019 and purchased a smaller flat for £300,000. When Leila dies in 2024, the flat (net of mortgage) is worth £280,000. Her estate (including the flat and other assets) totals £1.3 million. She leaves the flat and £50,000 cash to her son; the residue goes to her sibling.

Question:
How is the downsizing addition calculated?

Answer:
Notional RNRB on the former residence: £175,000 (assuming no transferred RNRB).
Default RNRB at death on the replacement flat: capped at the flat’s value passing to the son, £280,000, but the maximum RNRB is £175,000. So default RNRB applied = £175,000.
Lost RNRB = £175,000 (notional) - £175,000 (default at death) = £0.
No downsizing addition is needed because the default RNRB fully covers the available amount. If Leila had left the flat to a non-lineal beneficiary, the lost RNRB would have been £175,000, and the downsizing addition would then be capped by the £50,000 that passed to her son.

Transfer of Unused RNRB

If the first spouse or civil partner to die does not use all of their RNRB (e.g., because their estate passes to their spouse), the unused percentage can be transferred to the survivor. The survivor's estate can then claim up to double the RNRB in force at their death, subject to taper and the property cap. The transferred percentage is determined at the first death and applied to the RNRB at the second death, even if the first death was before 6 April 2017.

Worked Example 1.5

Scenario:
John dies in 2017, leaving his entire estate to his wife, Mary. Mary dies in 2023, leaving her home to her son. The RNRB in 2023 is £175,000.

Question:
How much RNRB can Mary's estate claim?

Answer:
Mary’s estate can claim her own RNRB (£175,000) plus 100% of John’s unused RNRB (£175,000), for a total of £350,000, capped by the value of the home.
If Mary’s estate exceeded £2 million, the combined £350,000 would be subject to tapering (£1 for every £2 over the threshold).

Application to Lifetime Transfers

The RNRB only applies to transfers on death. It does not apply to lifetime gifts, even if the property is given to a direct descendant. However, if a gift of a residence is made during lifetime and the donor continues to benefit from it (e.g., by living there rent-free), the gift is treated as a "gift with reservation of benefit" and the property is included in the death estate for IHT purposes. In that case, if the property is then “closely inherited” at death (for example, left to a lineal descendant outright or via a qualifying trust), the RNRB can still apply to that property included under the reservation rules.

Key Term: gift with reservation of benefit
A gift where the donor continues to benefit from the property after making the gift. For IHT, the property is treated as still belonging to the donor at death.

Worked Example 1.6

Scenario:
Farah gifted her house to her daughter in 2018 but remained living there without paying full market rent. She dies in 2025, leaving other assets to charity and confirming the daughter remains the owner of the house. The house is included in Farah’s estate under the reservation of benefit rules.

Question:
Can the RNRB apply?

Answer:
Yes. Although the property is included in Farah’s death estate under the reservation rules, the qualifying residential interest passes to a direct descendant (the daughter). Therefore, the RNRB can apply (subject to the cap and any taper).

Worked Example 1.7

Scenario:
Omar’s will leaves his house to a discretionary trust for his family. The trustees later appoint an immediate post-death interest (IPDI) for Omar’s adult son within two years of death. Omar’s estate is £1.6 million.

Question:
Does the RNRB apply?

Answer:
Yes, an IPDI in favour of a lineal descendant is a qualifying route for “closely inherited” purposes. Provided the house was a qualifying residential interest, the RNRB can be applied (up to £175,000), taxed first at 0%, then the NRB, and then the remaining estate at 40% (or 36% if the charity test is satisfied). If a purely discretionary trust remained without an IPDI, the RNRB would not be available.

Worked Example 1.8

Scenario:
Nadia’s estate is £2.2 million, including a home worth £400,000 (left to her son) and a qualifying trading business worth £700,000 (left to her daughter). The business qualifies for 100% BPR. Nadia has no transferable RNRB.

Question:
How will the RNRB be affected?

Answer:
Tapering uses the estate value before reliefs/exemptions. Estate exceeds £2 million by £200,000, so the taper reduces the RNRB by £100,000.
RNRB (£175,000) reduced to £75,000 (£175,000 - £100,000).
The reduced RNRB is then applied to the home. BPR removes the business value from the chargeable estate for tax purposes, but does not reduce the estate value for taper.

Worked Example 1.9

Scenario:
Isla sold her long-term home (then worth £600,000) in August 2016 and moved into rented accommodation. She dies in 2023 with an estate of £1.5 million, leaving £120,000 cash to her grandson and residue to her sister. No property is owned at death.

Question:
How is the downsizing addition determined?

Answer:
As the sale was after 8 July 2015, a downsizing addition can be considered.
Notional RNRB on the former residence: £175,000.
Default RNRB at death: none (no residence).
Lost RNRB = £175,000.
Value passing to lineal descendants = £120,000.
Downsizing addition = lower of £175,000 and £120,000 = £120,000.

Worked Example 1.10

Scenario:
Taj dies leaving a pecuniary legacy of £1 million to his son and residue of £1 million, which includes his residence worth £800,000, to his cohabitee. No RNRB is available because the residence is not “closely inherited” by a lineal descendant.

Question:
Is there a way to secure the RNRB?

Answer:
Yes. The son and cohabitee can execute a variation within two years of death so that the son inherits an interest in the residence (with the cohabitee taking other assets). A valid variation that meets s.142 IHTA requirements is read back for IHT purposes and can secure the RNRB. Appropriation by the PRs alone would not suffice, as “inheriting” requires a disposition on death.

Exam​ Warning

For RNRB transferability, compute the transferred percentage from the first death and then apply that percentage to the RNRB in force at the second death. Taper applies to the combined RNRB (including the transferred amount and any downsizing addition). Do not attempt to taper each separately and then add; taper reduction applies to the total allowance.

Revision​ Tip

Where more than one residence qualifies, instruct PRs to select the most valuable property (subject to the cap). If residue is divided between lineal descendants and non-lineal beneficiaries, treat the residence value as inherited proportionately; apply the RNRB only to the attributable portion. Where a trust is involved, check the trust’s category: IPDI for a lineal descendant qualifies; a pure discretionary trust does not unless converted appropriately.

Interaction with Other​ Reliefs

The RNRB is applied after BPR/APR. However, for the purposes of tapering, these reliefs and exemptions are ignored. It is possible to have an estate with little or no IHT due after reliefs and exemptions, but no RNRB because the gross estate value triggers full taper. Conversely, where BPR/APR do not impact the estate value for tapering, they remain valuable in reducing the chargeable estate for the main IHT calculation.

Charity reduced rate: the 36% rate applies if charitable legacies meet the 10% baseline test. When calculating the baseline amount, the RNRB is ignored; exemptions and reliefs (other than the charity exemption) and the available NRB are deducted first, then the charity 10% test is applied.

Downsizing and the​ RNRB

If a person downsizes or sells their home after 8 July 2015 and leaves assets to direct descendants, the estate can claim a downsizing addition. The calculation is complex but, in practice, the downsizing addition is capped at the lower of the lost RNRB and the value of assets left to direct descendants. Ensure proportional allocation where the estate is shared between lineal and non-lineal beneficiaries; only the portion passing to lineal descendants can support the downsizing addition.

Note common pitfalls:

• If the replacement property is left to a non-lineal beneficiary, any default RNRB is lost, but a downsizing addition may still be available up to the value left to lineal descendants.
• If the estate is above £2 million, taper applies to the combined RNRB and downsizing addition.
• If the estate includes fractional interests subject to valuation discounts, the cap on the RNRB can be lower than expected.

Transfer of Unused​ RNRB

If the first spouse or civil partner to die does not use all of their RNRB (e.g., because their estate passes to their spouse), the unused percentage can be transferred to the survivor. The survivor's estate can then claim up to double the RNRB in force at their death, subject to taper and the property cap. Where both spouses die leaving their estates spouse-exempt, the survivor can benefit from two RNRBs and two NRBs; however, tapering may remove the combined RNRB if the survivor’s estate exceeds £2.7 million.

Worked Example 1.11

Scenario:
John dies in 2017, leaving his entire estate to his wife, Mary. Mary dies in 2023, leaving her home to her son. The RNRB in 2023 is £175,000.

Question:
How much RNRB can Mary's estate claim?

Answer:
Mary’s estate can claim her own RNRB (£175,000) plus 100% of John’s unused RNRB (£175,000), for a total of £350,000, capped by the value of the home.
If Mary’s estate exceeded £2 million, apply taper to the combined £350,000.

Application to Lifetime​ Transfers

The RNRB only applies to transfers on death, not to lifetime gifts. PETs and CLTs interact with the NRB through the cumulation principle and may affect the NRB available to the death estate. Taper relief applies only to lifetime transfers that become chargeable as a result of death within seven years, reducing the amount of tax on those transfers depending on the period of survival beyond three years. The RNRB is not affected by lifetime transfers except through any impact on the value of the estate for tapering (which is assessed before reliefs/exemptions and does not include prior lifetime transfers).

Gift with reservation of benefit rules can bring gifted property back into the death estate where the donor retained benefit. If such property is “closely inherited” at death and is a qualifying residential interest, the RNRB can apply (subject to caps and taper).

Key Point Checklist

This article has covered the following key knowledge points:

• The RNRB is an additional IHT allowance for homes left to direct descendants.
• The maximum RNRB is £175,000 per person, but it is reduced for estates over £2 million by £1 for every £2 over the threshold.
• Taper applies to the combined RNRB (including any transferred amount and downsizing addition), not to each separately.
• The RNRB can be transferred between spouses/civil partners as a percentage of unused RNRB; the survivor’s combined RNRB is then subject to taper and the property cap.
• The downsizing addition preserves the RNRB if a home is sold or downsized after 8 July 2015; it is the lower of the lost RNRB and the value passing to direct descendants.
• The RNRB only applies to transfers on death, not to lifetime gifts; gifts with reservation can bring property back into the estate at death.
• “Closely inherited” can be achieved via outright gifts and certain trusts (IPDI for lineal descendants, bereaved minors and 18–25 trusts); a pure discretionary trust does not qualify unless appropriately restructured.
• For RNRB tapering, use the estate value before reliefs/exemptions (ignore BPR, APR, spouse, and charity exemptions at that stage).
• The RNRB is ignored when calculating the charity 10% baseline; the charity rate applies to the chargeable estate after nil rate bands.
• Where multiple residences qualify, PRs should select the most valuable within the cap; where residue is divided between lineal and non-lineal beneficiaries, apply pro-rata allocation of residence value.

Key Terms and Concepts

• potentially exempt transfer (PET)
• chargeable lifetime transfer (CLT)
• nil rate band (NRB)
• residential nil rate band (RNRB)
• qualifying residential interest
• direct descendant
• gift with reservation of benefit