Inheritance Tax Threshold Increase
O EVANS • 10 August 2020
The new main residence allowance which came in on the 6th
April 2017 significantly increases the Inheritance Tax threshold of married
couples and registered civil partners.
The change means that eventually parents and grandparents will be able to pass on assets worth up to £1,000,000 including a family home without any Inheritance Tax being charged.
Currently the base rate for the tax threshold is £325,000 with successive relief for marriage couples and civil partners totalling £650,000.
However from the 6th April 2017 the main residence allowance will be introduced gradually, starting at £100,000 and rising to £175,000 in April 2020 (now). That creates a tax threshold of £1m per couple.
As with the standard nil rate band threshold, the property allowance will be transferrable to a surviving spouse or registered civil partner.
That is very good news for a majority of property owners in the UK where house prices have now increased over the years to well in excess of the joint tax threshold of £650,000.
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Almy & Thomas notice that some of our colleagues in other practices do not publish details of their costs specifically relating to the preparation and drafting of Wills and the preparation and application for Lasting Powers of Attorney, which are significant steps in anybody’s day to day life. Almy & Thomas are transparent as to the costs of preparing Wills and Lasting Powers of Attorney. Visit our Costs Page and make an appointment to discuss your requirements with Flis Cotton (Head of Department), Kirsty Neill (Assistant Head) or Sophie Lansdale. They will explain and quote for any work that needs to be undertaken in that respect
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The office will be closed for the Christmas break from 12:00 Noon on Friday 20th December 2024 and will re-open at 9:00am on Thursday 2nd January 2025. We would like to wish all our current, past and future clients a very Merry Christmas and a Happy New Year.
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A news items appears in the Daily Telegraph whereby a widower who has been given a life interest in the family home by his Deceased Wife is challenging the limited benefits of that bequest on the basis that he was married to his Wife for a number of years. To the shock and horror of his family he has made a claim for family provision to seek a capital sum from his Wife’s Estate. This is a timely reminder that your last will and testament is definitely not necessarily the case. You need to make provision in your will for those that should be reasonably within your consideration at the time of your death. To effectively deny your surviving spouse gives rise to a claim for at least 50% of the Deceased’s Estate. We are not sure why the family are horrified that their father would make such a claim.
We read with some amusement the recommendation of Martin Lewis to say that a very simple way of mitigating Inheritance Tax is to get married! We are not sure that that dramatic step is the better way of mitigating Inheritance Tax. Our Divorce Department would suggest that it can create as much problems as it solves. The adviser goes on to say that once you have married you can give as much money away as you want without giving rise to a liability for Inheritance Tax. That again is wrong. If you do require advice as to mitigating Inheritance Tax, please contact Mrs. Cotton in our Private Client Department on 01803 299131.
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