Skip to content

ACCA Strategic Professional · Advanced Taxation (UK) · Inheritance tax: the use of exemptions and reliefs in deferring and minimising inheritance tax liabilities

Which statement about the residence nil rate band (RNRB) is correct for the ATX-UK exam, assuming a deceased person with an estate below the taper threshold?

The residence nil rate band is £175,000 and is available on death only when a qualifying home passes to direct descendants. It is in addition to the £325,000 nil rate band and does not apply to lifetime transfers.

  1. AIt is £175,000 and is available only if a residence is left to direct descendants, in addition to the nil rate band of £325,000Correct
  2. BIt is £175,000 and is available on any estate left to a spouse or descendants regardless of whether a home is included
  3. CIt is £325,000 and is available to anyone who owns a home at death
  4. DIt is £175,000 and applies to chargeable lifetime transfers made within seven years of death

Explanation

The residence nil rate band is £175,000 and applies on death where a qualifying residence passes to direct descendants. It is additional to the £325,000 nil rate band. It does not apply to lifetime transfers, and a home must be involved.

Did you get it right without looking?

One question tells you little. A timed set on Inheritance tax: the use of exemptions and reliefs in deferring and minimising inheritance tax liabilities shows your real accuracy, how long you take and where you lose marks.

Practise Inheritance tax: the use of exemptions and reliefs in deferring and minimising inheritance tax liabilitiesFree diagnostic mock

More Inheritance tax: the use of exemptions and reliefs in deferring and minimising inheritance tax liabilities questions