With no changes to inheritance tax announced in the recent Budget below is a summary of the allowances and exemptions currently in place. At present each individual is allowed the first £325,000 of their estate free of inheritance tax, referred to as the Nil Rate Band. Inheritance tax at 40% is usually payable on any value above £325,000, although no tax is payable on gifts to spouses, Civil Partners and registered charities.
If you leave your home to Descendants (eg children, grandchildren and stepchildren), an additional Residence Nil Rate Band of £175,000 is available. Note that the Residence Nil Rate Band only applies to the home and not to any further properties owned by the deceased. A taper, or reducing scale, applies if the value of the estate exceeds £2 million.
Both the Nil Rate Band and the Residence Nil Rate Band can be transferred between spouses and Civil Partners.
If your estate will exceed the inheritance tax allowances you can take steps to minimise liability. It is essential to take legal advice on inheritance tax planning measures and to make a valid will in order to benefit from the allowances and exemptions.
Bretherton Law have been helping the people of Hertfordshire to manage their affairs for over 50 years. Our expert team can guide you through the probate process, as well as helping you to draw up a Will and Lasting Powers of Attorney, or act on your behalf in relation to Court of Protection or Trust matters. Contact Anne Stockley on 01727 869293 or contact us using the form below.