Inheritance Tax Act 1984 Schedule A1 paragraph 8

UK residential property interest

Paragraph 8 of Schedule A1 defines what counts as a "UK residential property interest" for the purposes of inheritance tax on assets held through indirect structures such as trusts or companies.

• A UK residential property interest is an interest in UK land where the land is a dwelling, includes a dwelling, or is the subject of an off-plan purchase contract for a building intended to become a dwelling.
• Where land only partly includes a dwelling, the extent of the residential element must be determined on a just and reasonable basis.
• The definition of "interest in UK land" follows the same meaning used for capital gains tax purposes under the Taxation of Chargeable Gains Act 1992, and "dwelling" takes its meaning from the Finance Act 2019.
• An off-plan purchase contract is one for acquiring land that includes a building, or part of a building, still to be constructed or adapted for use as a dwelling.