In April 2017 a new allowance for inheritance tax planning was introduced called “The Residence Nil Rate Band”. This allows further inheritance tax planning opportunities, in certain situations, in respect of the family home.
The allowance will increase from a current figure of £100,000 per individual to £175,000 by 2020/21.
The Residence Nil Rate Band can be used in conjunction with the regular Nil Rate Band and is transferable on the death of the first spouse. Where the Residence Nil Rate Band applies, therefore, the survivor can make use of the transferable Nil Rate Band and benefit from two Residence Nil Rate Bands on their death.
The application of the Residence Nil Rate Band is quite specific and is not always obvious when looking at tax planning opportunities. This is most relevant when examining the use of Trusts within Wills and especially for existing Wills, where the use of a Trust may have been sensible at the time but needs reconsidering in light of the recent changes.
Our expert team here at Butcher & Barlow can provide the necessary advice to guide you through the Estate Planning process in order to ensure that your affairs are put into order in the most tax efficient way possible.
Please contact a member of our team below in order to arrange a mutually convenient appointment to discuss your personal requirements.