Dwelling house relief clarification

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valery

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Does a person have to live "rent free" to qualify for dwelling house relief, assuming that the other criteria would be met?
 
Thank you very much for your replies.

I have been reading up on this relief and have a further query.

It appears that if you bequeath an investment property to your child, they cannot claim dwelling house relief if you also leave them a share in the family home.

To overcome this, can you stipulate that the home be sold by the executor and a percentage of the proceeds be given to the child inheriting the investment property?

When I was making my will, the solicitor never mentioned this relief and it is only thanks to this forum that I know about it.
 
can you stipulate that the home be sold by the executor and a percentage of the proceeds be given to the child inheriting the investment property
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Yep, it's your will; provided there's nothing illegal you want done, you can pretty much put in whatever you want!
 
Yes, I know you can pretty much draw up your will as you want, I want to minimise inheritance tax. We have a second property, bought at the wrong time, paying down a mortgage that exceeds the value of the property, so the final nail in the coffin, excuse the pun, would be for the revenue to get more tax from it.
If you will someone a house that they have lived in for at least 3 years, plus a share in the family home, Revenue will refuse dwelling house relief. My question is, if you direct that the family home be sold and the proceeds distributed, will revenue be still able to refuse the relief? In the latter case the adult child will be getting the investment property plus a share of proceeds of the family home rather than a share in the home.
 
You've answered your own question OP, if you bequeath someone a house (or interest in a house) then that's what they inherit, and if you leave them an interest in the proceeds of the sale of a house then that's what you leave them.
 
You only pay inheritance tax on the proceeds left after all costs are taken out so in the situation of a second house in the will the mortgage will first need to be paid off and if it exceeds the value of the second house then the balance will be drawn from the proceeds of the first house. Then you have what is left to distribute and apply allowances before tax is applied.
 
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