Is family home excluded from 2 year old childs Inheritance tax bill

Hi There,

I'm trying to determine what's included in a potential Inheritance Tax liability. The inheritance for a 16 month old child is circa €1.5 million based on current valuations. I'm aware of the current parent to child threshold of €225,000 reducing the taxable amount to €1,275,000. However €450,000 of this is the family home. I know that there is dwelling house relief with the following exemptions

1) It is the principal private residence of the recipient.

2) The house must be owned by the disponer during the 3 years prior to the gift.

3) The recipient had been living in the home for the three years immediately proceeding the transfer.

4) The recipient does not have an interest in any other residential property.

The child does not fullfill criteria 3, so what happens in this scenario. Does the home form part of the taxable inheritance.

Thanks

Is this an exam question by any chance?

If it is actually a serious question, you should be hot footing it off to your accountant!

mf