Can you claim an extra £100k Inheritance Tax Allowance?

Posted: 22nd May 2017

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By: Joanna Parkin

Can you claim an extra £100k Inheritance Tax Allowance?

Snappily entitled the ‘Residential Nil Rate Band’, this new measure could make a significant difference to those with estates over £325k but to benefit your Will must meet certain criteria….

Here are 5 things you need to know about the new Residential Nil Rate Band:

    • From 6th April 2017 each individual passing residential property to children or grandchildren will receive an extra £100k allowance (on top of the £325k that is already available) before Inheritance Tax is payable
    • It will rise in increments of £25k per year until 2020-2021 when it will be £175k for each individual
    • Where spouses or those in civil partnerships own a property they can combine their allowances
    • If an estate is over £2m it will start to taper down (£1 is lost for every £2 over £2m)
    • The main residence does not have to be owned at the date of death if eg if you have downsized to a smaller property

In order to benefit from the new legislation the Will must meet certain criteria and you should take advice on this. If you have a Will which contains a nil rate band discretionary trust, it is important that you seek advice as the new Residential Nil Rate Band may not be available to you if you continue to use that structure.

If you’ve been thinking about reviewing your current Will or making a Will for the first time I can help and give bespoke advice fitted to your circumstances.

For an informal initial discussion, please get in touch with me joanna@fouroakslegalservices.com or call me on 0121 323 2070