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People don’t need to own a property to benefit from new IHT property proposals


According to HMRC’s technical note outlining the new main residence nil-rate band and downsizing proposals, people don’t need to own a property on death to benefit from the new residence nil-rate band. Provided they owned a property as at 8 July 2015, it doesn’t matter if, when or how they dispose of the property, their estate will still benefit from the residence nil-rate band on death.

Under these new proposals, someone looking to minimise IHT may look to give away their family home to their child whilst they are alive. If the child is agreeable and a market rent is paid they may still have a right to live in the home. Provided they survive 7 years there will be no IHT to pay on death on the family home. The residence nil-rate band can then be used to help minimise IHT on the rest of the deceased’s estate.

By not linking the new residence nil-rate band to the value of the deceased’s property on death, or within a defined period of death, means the new proposals are just a way of enhancing the IHT nil-rate band on the overall estate.

Another area of concern is that the new residence nil-rate band rules apply to direct descendants only. This seems more akin to forced hiership and contradicts the principles of the English and Welsh legal system which allows people free will to select their beneficiaries.

Rachael Griffin, financial planning expert, Old Mutual Wealth:

“This seems a very generous proposal and means people can benefit from an enhanced IHT allowance even if they don’t own a property.  The restrictions around who can benefit from the new proposals also seem very archaic in this modern world, where not everyone marries or has children.”

“These extra rules will make estate planning even more complicated for people. A far simpler approach would have been to enhance the IHT allowance for everyone, and not try to link it to a property they currently or previously owned, and not try to limit it to direct decedents.”

Sophie Heywood (Lenton)  
Corporate Communications Manager | Old Mutual Wealth

M: +44 (0)7834 499 558

T: +44 (0)23 8091 6770 | Ext: 21770
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Notes to Editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £118.4 billion in investments (as at 30 June 2019).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.

The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.

Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

Wealth Platforms includes Old Mutual Wealth UK platform; Old Mutual International, including AAM Advisory in Singapore; and the Old Mutual Wealth Heritage life assurance business.

The Quilter plc businesses are being re-branded as follows: 

  • Quilter Financial Planning (previously Intrinsic)
  • Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
  • Charles Derby Group (becoming Quilter Financial Advisers)
  • Quilter Financial Adviser School
  • Quilter Cheviot
  • Quilter Investors
  • Old Mutual Wealth (becoming Quilter Wealth Solutions in 2020)
  • Old Mutual International (becoming Quilter International in 2020)

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