Scheme was put in place to protect carers
THE dwelling-house exemption was introduced to protect someone living with and caring for an older person in the pensioner's home.
If this home is left to them, they may have to sell it to pay the 33pc inheritance tax. In the meantime, they may have sacrificed their chance to own their own home.
So the relief allows houses and apartments to be inherited tax-free. Under the exemption, a son or daughter inheriting a property has to live in it for at least three years, and continue to live there for six years after inheriting it. The property being passed on doesn't have to be a family home - it could be a second property or holiday home. Neither does it have to be passed on to a relative.
If they meet these conditions, they inherit the property tax-free.