Part 2: Inheritance Tax Section 9: Increased nil-rate band on death where home inherited by descendants etc. Details of the section Section 8M: Residence nil-rate amount: cases involving conditional exemption
New section 8M makes provision for cases where a residence left to direct descendants qualifies for conditional exemption.
	Subsection (1) explains in what situation the section applies.
	Subsection (2) provides that to the extent that a residence is conditionally exempt, it is treated as not closely inherited so that the appropriate proportion of the residence nil-rate band is available to carry forward.
	Subsection (3) provides for the residence nil-band to apply to charges which arise when conditional exemption ceases to apply (that is, if the undertakings to secure the conditional exemption are not kept, the owner dies, or the property is sold, given away or disposed of).
	Subsection (5) applies where the deceased's ("D") surviving spouse or civil partner ("P") dies before the charge arises and the residence nil-rate band, or part of it, is transferred to P. Where this happens, the residence nil-rate band available against the charge is reduced by the amount transferred to P.
	Subsections (6) and (7) apply where the charge arises before P's death. Where this happens, the amount of residence nil-rate band available for transfer to P is recalculated to take account of the amount (if any) of the residence nil-rate band that was used by the charge when conditional exemption ceases to apply.