From April 2017 a new IHT- free allowance has being introduced. It is to be known as the Residence Nil Rate Band (RNRB) and will apply if you leave your residence to your “direct descendants”.
The objective of the policy according to the Government is to “reduce the burden of IHT for most families by making it easier to pass on the family home to direct descendants without a tax charge.”
For some years now the nil rate band has been fixed at £325,000 and it looks like it will remain set at this amount for the next few years. At the moment IHT is charged at 40% on the value of a deceased person’s estate which exceeds the nil rate band. Where spouses or civil partners leave their estates to each other the nil rate band can be transferred giving a maximum of £650,000 IHT free.The RNRB when introduced can also be transferred between spouses and civil partners.
If you would like more information or to find out whether you should consider revising your Will to benefit from this new allowance, please contact me, Heather Warnock, at heather@mitchells-roberton.co.uk or by telephoning 0141 552 3422.