The new band starts off on 6 April 2017 at £100,000 per person and gradually rises so that by 6 April 2020 it will be up to £175,000. By this time a married couple or civil partnership could be protecting up to £350,000 of the value of their residence or former residence from inheritance tax charges, as a direct result of the new band.
It will also be transferable between spouses and civil partners where the death of the second person in the couple occurs on or after 6 April 2017.
The intention is to allow relief from inheritance tax if a person passes on their home to their direct descendants (e.g. children/grandchildren) on death. Those wanting to downsize to a smaller home, or wanting to sell up in their lifetime are also going to be being catered for.
Inevitably there are many conditions and the new band won’t be given in all circumstances.
Some of the key aspects are:
- who is going to inherit your house? (not everyone counts)
- if it is in trust now, or being left into trust on death, what sort of trust is it and who is it for? (not all trusts count)
- how big is your estate likely to be? (there is a threshold which affects/withdraws the band)
- have you written a Will and if so, how does the new band fit in with its provisions?
To get your house in order, contact either Sarah Gray or David Nash on 01788 539000.