The increased allowance – The ‘Residence Nil Rate Band’
The new tax year has brought with it some welcome good news for those with larger estates with some new Inhertiance Tax allowances. The Residence Nil Rate Band has risen from £150,000 to £175,000 per person. The allowance is transferable between spouses and civil partners, so this means that for those people, when you die, if you have equity in your house of £350,000 that’s an extra allowance you can claim. You simply have to leave your family home to direct descendants*. This is on top of the £325,000 per person (also transferable, so £650,000 for spouses or civil partners).
News gets old very quickly at the moment. This change originally came from an election promise by David Cameron. He promised to allow families to leave £1 million free of Inheritance Tax. While this will not apply to everybody, including those with larger estates, many people will now pay no Inheritance Tax at all when they die. The policy first came to light here in 2015 and has been implemented in stages since 2017.
*For full details on exactly who can claim the new Inheritance Tax allowances please have a look at the information on the HMRC website. Or give us a call on 01473 358195, or click here.
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