New Tax Rules – Up to a Million Pounds Can Be Left to Children Without Paying Inheritance Tax
Solicitor Rachael McCarthy Jones considers the new tax rules which mean couples can now leave up to £1,000,000.00 to their children without paying Inheritance Tax.
The 6th April 2020 saw the start of a new tax year and a further increase to the residence nil rate band allowance.
The residence nil rate band allowance was introduced in April 2017 with £100,000 nil rate band per person and has increased by £25,000 at the start of every new tax year until it has reached £175,000, the maximum allowance. This residence nil rate band benefits those who leave their residence to their children or grandchildren on death.
This residence nil rate band is in addition to the nil rate band of £325,000.
A couple, when passing assets down to their children or grandchildren, can potentially benefit from 2 x nil rate band totalling £650,000 and 2 x residence nil rate band totalling £350,000, which equates to £1 million.
The nil rate band and residence nil rate band are complicated reliefs to maximise. It is therefore important that you take specialist legal advice to ensure that your Wills incorporate the necessary provisions.
At JNP Legal, our Life Planning Team will ensure you receive expert legal advice, tailored to suit your individual circumstances. Due to the current restrictions on travel, and social distancing requirements, we are fully equipped to take instructions and prepare Wills without you needing to travel to our offices to execute them.
If you have any questions please contact a member of the Life Planning Department on 01685 350421 or law@jnplegal.org