On 5th April 2017 the nil-rate tax band for Inheritance Tax will be changing.
- How does the new residential nil-rate band affect me?
- What would my tax free allowance be when the new nil-rate tax band comes into force?
- The group of people that are affected are individuals with direct descendants who have an estate with total assets above the current Inheritance Tax (IHT) threshold (or nil-rate band) of £325,000 and personal representatives of deceased persons.
From 5th April 2017 the government is introducing an additional nil-rate band when a residence is passed on death to a direct descendant.
The rates are increasing each year and additional allowances are as follows:-
- £100,000 in 2017 to 2018
- £125,000 in 2018 to 2019
- £150,000 in 2019 to 2020
- £175,000 in 2020 to 2021
This measure will 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
This is now a good time to review your families Inheritance Tax position. For more advice please call to speak to one of our Probate team, Sangeet Tatem at Collier Row, Rachael Fleet at Romford and Jodi Hamlin at Gidea Park.
You can read the goverment’s full article by clicking on the link below