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HMRC internal manual

Inheritance Tax Manual

More detailed guidance: Direct descendants

A lineal descendent is a person who is in direct line from an ancestor; this includes a child, grandchild, great-grandchild etc. The provisions are not restricted to blood relatives, and the following rules apply for the interpretation of IHTA84/S8K(1).  They extend the definition of a child to include the persons listed in deciding whether property is closely inherited for the purposes of the RNRB.

  • A person who is at any time a step-child of another person is treated, at that and all subsequent times, as the child of that other person, (IHTA84/S8K(3)).
  • An adopted person remains the child of their natural parents, but this does not affect the fact that they are legally the child of their adoptive parent(s), (IHTA84/S8K(4)). For the purposes of this section ‘adopted person’ has the meaning given in IHTA84/S8K(9).
  • A person who is at any time fostered by a foster parent is treated, at that and all subsequent times, as the child of the foster parent, (IHTA84/S8K(5)). For the purposes of this section ‘foster parent’ has the meaning given in IHTA84/S8K(10).
  • A person under the age of 18 years at the time the appointment takes effect, who has another person appointed as their guardian or treated by law as appointed as their guardian, is treated at all times after the appointment takes effect as the guardian’s child (IHTA84/S8K(6)).
  • A person under the age of 18 years at the time the appointment takes effect, who has another person appointed as their special guardian or treated by law as appointed as their special guardian, is treated at all times after the appointment takes effect as the special guardian’s child, (IHTA84/S8K(7)).

Where under any of the preceding bulleted points a person is to be treated at any time as the child of second person, that ‘child’s’ lineal descendants are treated as lineal descendants of that second person, regardless of when those lineal descendants were born (IHTA84/S8K(8)).

The legislation also extends the scope of ‘closely inherited’ to include a person who is the spouse or civil partner of a lineal descendant of the person who has died, or if the lineal descendant has pre-deceased, to their surviving spouse or civil partner as long as they have not re-married, or entered into a new civil partnership.

Example

John dies after 5 April 2017 and leaves his only home to his grandson in his will.  The property is closely inherited.

Example

Janet dies intestate in England and Wales after 5 April 2017.  Her property, including her only home, is divided under the rules of intestacy between her three nieces and nephews.  The property is not closely inherited.

Example

Peter dies after 5 April 2017 and leaves his only home to his late daughter’s civil partner.  Since Peter’s daughter’s death, but before Peter’s death, her civil partner has married.  The property is not closely inherited, because of the marriage of Peter’s daughter’s civil partner before Peter’s death.

Example

Jane marries Edward, who has two adult sons by his first wife.  Many years later, after Edward’s death and 5 April 2017, Jane dies and leaves her only home to Charlotte, the daughter of the elder of Edward’s children, who was a baby at the time Jane married Edward.  The property is closely inherited.  Edward’s sons became Jane’s step-children upon her marriage to Edward and remained so following his death.  Charlotte is a lineal descendant of Edward’s son, even though she was born before the marriage of Jane and Edward, and is treated as a lineal descendant of Jane, as Edward’s son is treated as a lineal descendant of Jane.

Example

Pavel is the adopted child of Thomas and Barbara.  Following the death of his adoptive parents, after 5 April 2017, Pavel inherits their only home.  This property is closely inherited.  Some years later Pavel inherits the only home of Fyodor, his natural father, under Fyodor’s will.  This property is also closely inherited.

Example

Ada was 14 years old when John was appointed as her guardian under section 5 of the Children Act 1989.  Ada married Richard when she was in her early twenties, but died in an accident a few years later.  In his will John leaves his only home to Richard.  John dies after 5 April 2017 and before Richard has married again.  The property is closely inherited.  Ada was under the age of 18 when the guardianship took effect, so she is treated as the lineal descendant of John, Richard was her spouse at the time of her death, which took place before John’s death, and Richard had not married again at the time of John’s death.    

Example

Angela dies leaving her only home on life interest trusts to her spouse Barry, with their children Charlie and Daniel inheriting absolutely in equal shares when Barry’s life interest comes to an end. The home, as a qualifying interest in possession, forms part of Barry’s estate when he dies and RNRB will apply to his estate if it passes to his lineal descendants. Charlie tragically dies before Barry. When Barry dies half the home passes under the terms of the trust to his son Daniel who is clearly Barry’s lineal descendant, and therefore RNRB will be available to the extent of this share. The other half of the home was a reversionary interest which was excluded property when Charlie died and therefore did not form part of her estate. However the interest does pass under the terms of her will / intestacy, and if this disposition was to a person who is a lineal descendant of Barry, or was Charlie’s spouse or civil partner, then RNRB will apply. Had Charlie left her estate to a friend, or a person who was not a lineal descendant of Barry, then RNRB would not apply to this share.