A new tax relief will be available from 6 April this year, for property owners who leave their property to their spouse or their children and grandchildren.
At present, each of us is able to leave £325,000 to anyone we choose, without creating any inheritance tax liability. If your personal estate is worth more than £325,000 any amount over this sum can be taxed at 40%. This means for every £1 you leave which exceeds £325,000, 40p will go straight to the Government. For this reason estate planning has always been a very important aspect of the work that we do for our clients at North Ainley.
From 6 April 2017, the Government has introduced a new tax relief known as the Residence Nil Rate Band (RNRB) which will see homeowners who die after April 2017 leaving their property to their spouse or children, being able to claim up to an additional £100,000 of tax relief. This amount is set to increase by £25,000 each year until 2020 when the additional relief that homeowners can claim will be up to £175,000 per person.
It makes sense to keep your Will under regular review to take advantage of changing circumstances and this is an excellent time to make a Will if you do not already have one. This latest change in legislation offers a perfect opportunity to reconsider the planning of your estate and whether or not your current arrangements take maximum advantage of the tax reliefs available.
However, the rules are complicated and the availability of the additional relief depends on your individual circumstances. We are happy to discuss your current arrangements to see if changes could be made. That way, we can advise you on the best course of action to take advantage of all tax reliefs available to your estate on your death and ensure that you maximise your RNRB entitlement.
To arrange an appointment with a member of our Private Client Team please get in touch using our Contact Form.