Inheritance Tax (IHT) is a tax on the estate of someone who’s died – the rate can be as high as 40%. We each have a ‘nil rate band’ of £325,000. Married couples and civil partners are allowed to pass their estate to their spouse tax-free when they die and IHT is payable.
Spouses can also pass on their unused tax-free allowance to their surviving spouse. This combined allowance means that when she dies, her estate will only incur Inheritance Tax if it’s worth more than £650,000 (£325,000 + £325,000).
From 6 April 2017, everyone has an additional £100,000 (rising to £175,000 by 2020-21) tax-free allowance to use against the value of their home. Also known as the residence nil rate band.
Broadly speaking, you can only get this additional allowance if they leave your home to your children or grandchildren. This allowance can also transfer to the surviving spouse if it isn’t used up already.
This means by 2020-21, a married couple could leave a combined estate of up to £1 million without incurring IHT.
The small print is far more complex than this article suggests and more detail can be found on THIS LINK
With new year’s resolutions not that far behind us, it might be well worth reviewing your will to ensure it can take advantage of this new relief.
As always, for help and advice with your business, tax matters or any other questions, please feel free to make contact with me and see what I can do for you.
Spouses can also pass on their unused tax-free allowance to their surviving spouse. This combined allowance means that when she dies, her estate will only incur Inheritance Tax if it’s worth more than £650,000 (£325,000 + £325,000).
From 6 April 2017, everyone has an additional £100,000 (rising to £175,000 by 2020-21) tax-free allowance to use against the value of their home. Also known as the residence nil rate band.
Broadly speaking, you can only get this additional allowance if they leave your home to your children or grandchildren. This allowance can also transfer to the surviving spouse if it isn’t used up already.
This means by 2020-21, a married couple could leave a combined estate of up to £1 million without incurring IHT.
The small print is far more complex than this article suggests and more detail can be found on THIS LINK
With new year’s resolutions not that far behind us, it might be well worth reviewing your will to ensure it can take advantage of this new relief.
As always, for help and advice with your business, tax matters or any other questions, please feel free to make contact with me and see what I can do for you.
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