18th April 2017
The new Residence Nil Rate Band for inheritance tax came into force last week. If people plan in advance and structure their Wills correctly the new rules could potentially save an individual £70,000 in inheritance tax, and married couples could save up to £140,000. The new rules will not automatically apply to everyone and a lot of people who have made Wills in the past will need to amend them in order to benefit. The Private Client team at MSI's Northern UK law member Myerson Solicitors have implemented solutions to the difficulties that arise from the new rules, and we are able to advise you on how to qualify for the Residence Nil Rate Band threshold. Myerson Solicitors provides further information on this subject matter.
What is the Residence Nil Rate Band?
This is a new inheritance tax threshold which can be used against the value of your property. It has been introduced at £100,000 per person but will rise £25,000 per year, until April 2020 when it will be £175,000 per person. The property, or the proceeds of sale, must be inherited by a descendant (i.e. a child, grandchild or further descendant. Step-children of married couples will also qualify (but not step-children of unmarried couples). People can still qualify even if they have sold their main property to downsize or to go into care. It is important that a good record is kept in these cases. The new threshold can be used in conjunction with the existing nil rate band (£325,000 per individual and £650,000 for a married couple). This means that by April 2020 married couples who qualify potentially will have a total threshold of £1 million, before inheritance tax is payable on their combined estate.
The new rules are not as straight forward as they first appear and it is important that people seek specialist advice in relation to inheritance tax planning. Contact Myerson Solicitors Private Client team for an initial discussion about how they can help you in this regard. Call the firm on (+44) 0161 941 4000 or email firstname.lastname@example.org.
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