What is Inheritance Tax?
If you pass on property or anything else of monetary value to your descendants you will pay inheritance tax, but only if the total value exceeds £325,000. Anything above that amount will incur tax at 40%. If you give away your home to your children (including adopted, foster or stepchildren) or grandchildren, your threshold will increase to £425,000.
As of April 2017, the Government introduced a new transferable main residence allowance to help people pass on property to their descendants.
Initially, this is set at £100,000 rising to £175,000 by 2020/21. When added to the IHT threshold of £325,000 it will allow each individual to pass on £425,000 with no tax payable, or £850,000 per couple. By 2021 the tax-free limit will £500,000 each or £1,000,000 for married/civil partners.
For more information and advice about Inheritance Tax please contact us on 0115 824 0555 or email us via our Contact Us page.
To discover more about the services that WKM Accountancy Services offers, visit our services page.