Changes to Inheritance Tax – Does your Will need to be updated?

On 6 April 2017, the residential nil-rate band (RNRB) came into force.  This new tax allowance could potentially enable couples who own their home to pass up to £1 million to their direct family, free of Inheritance Tax (IHT) when they die.

This additional allowance is being phased in gradually, with £100,000 being made available in 2017/18.  This means that individuals now a have a potential personal allowance of £425,000.

However, this is anything but a straightforward increase to the amount that can be bequeathed before IHT kicks in.  Recent surveys suggest that many people are confused over a number of aspects of the RNRB. For example, did you know:

• The allowance only applies when the property (or its value) is left to direct descendants
• If you own more than one property, only your main residence will qualify
• If the family home is placed into Trust, you could potentially miss out on the benefits

It is important that you speak to someone who understands the new rules to ensure your Will is structured in the most effective way possible. We can provide support and advice on how to reduce the amount of IHT your estate will owe.  Please contact us for a discussion.