QMY MOTHER left the UK in 1978, marrying a Spanish man and becoming a Spanish citizen. In 2000 she bought a property with view to returning to the UK in later years. My children have lived in the property since that time and my mother stayed there on many occasions, but never resided there. Unexpectedly, she passed away in May and the flat forms the main part of her UK estate and takes her above the IHT threshold. I have had varying advice as to whether I can claim the nil rate band allowance raising the threshold to £500,000.Can you please clarify this for me?

AI am sorry to hear of your mother’s passing, especially so far away in these travel restricted times.

Under current rules in this tax year everyone has an inheritance tax (IHT) allowance of £325,000. This means no tax is liable on an estate, as a person’s belongings become known on their death, below this value. Above this IHT is paid at 40 per cent. However if a family home forms part of the estate then the IHT limit can be raised to £500,000 provided the property is left to children or linear descendants. This gives a married couple an allowance of up to £1 million, as any unused portion can be transferred to the surviving spouse when one dies.

Unfortunately, however, it seems that you cannot claim the residence nil-rate band (RNRB) as although your mother owned the property she never actually lived in it. According to HMRC whether someone resided in the property depends on how they lived there rather than how long.

In its guidance it uses an example: “An elderly person who has very recently moved into their new home and has barely finished unpacking when they are taken ill and have to move into a nursing home would, we consider, have established their ‘residence’ for RNRB purposes. However, someone who just stays in a property for a number of weeks living out of a suitcase would not.”

You do not say how long your mother lived in the property but it sounds like she fits the latter rather than the former scenario. However if she had a room with her own belongings in the flat then things become less clear cut. Whether she had her own key and did she receive post at the address also confirm residency. You would need to get individual legal advice to determine whether she could be considered to have residency.

Sarah Wray, an associate at law firm Charles Russell Speechly says: “When submitting the inheritance tax return, as executor you make a declaration that the account is correct and complete to the best of your knowledge and belief and that incorrect, false or concealed information may lead to penalties being levied or, in extreme cases, prosecution. The question of what is a residence is a matter of fact and degree and so it is for you to satisfy yourself in the first instance that it is reasonable to make a claim for the residence nil rate band. It will then be up to HMRC to consider whether it wishes to enquire further on this point.”