Submitted by Sestini & Co
| on Fri, 08/03/2018 - 11:04 | In HMRC
, Tax planning and pensions
Back in the past when we had a coalition government and George Osborne was Chancellor, he announced a dramatic change to the inheritance tax rules, long set at £325,000 nil rate (with exceptions).
These changes are being phased in:
- From 6 April 2017 the nil rate band of £325,000 is supplemented by a ‘main residence’ band of £100,000 bringing the total to £425,000
- From 6 April 2018 the nil rate band is is supplemented by a ‘main residence’ band of £125,000 bringing the total to £450,000
- From 6 April 2019 the nil rate band is is supplemented by a ‘main residence’ band of £150,000 bringing the total to £475,000
- From 6 April 2020 the nil rate band is is supplemented by a ‘main residence’ band of £175,000 bringing the total to £500,000
Like IHT, this ‘main residence’ band applies to married couples, with the nil rate and main residence band of the deceased passing to the survivor on their death.
If the entire estate is left to the spouse or civil partner there is no inheritance tax to pay (usually).
Unmarried couples cannot benefit from the ‘married couples’ clause, however those in a civil partnership can.
Naturally there are caveats and exceptions.
http://interform-uk.com/portfolio/bringing-designs-life/ Over the band limits: For example, if your estate is worth over £550,000 this tax year and you aren’t passing it to your spouse, inheritance tax will be charged at 40% of £100,000.
can you buy Lyrica online Specialist occupations: If the estate belonged to someone in a ‘risky’ occupation such as firefighter or armed forces and they die on active duty, the estate is exempt from inheritance tax
where to buy provigil in singapore Bequeathing to your children: If you give away your home to your children or grandchildren the nil rate band increases from £325,000 to £450,000.
Bequeathing to charities or community amateur sports clubs: There is usually no inheritance tax to pay.
Charity bequests: The rate of IHT reduces from 40% to 36% if at least 10% of what would otherwise be taxable is left to charity.
Large estates: When a property is valued at above £2 million, IHT will be raised. £1 of the main residence allowance will be removed for every £2 of value above £2million. This means from 2019 that if the property is worth more than £2,400,000 no ‘residence allowance’ would be applicable.
More changes to come
In February the current Chancellor, Philip Hammond, mooted a review of the tax system and asked the Office for Tax Simplification to review a range of IHT areas, including gifts. An OTS consultation ran from April to June and a report is due to be published in autumn 2018.
Find out more
This is a complex area. More information can be found on the .gov.uk website and we would encourage you to contact us if you are planning how to leave your estate or are planning to give gifts during your lifetime, call us on 01761 241 861 or email us today. We will be pleased to set up a telephone call or invite you into our offices in Paulton, near Bristol and Bath, for a consultation.