If you pass on property in the East Midlands or elsewhere, 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%. From April 2017 the allowance RNRB (Residence nil-rate band) has allowed for further reduction of Inheritance tax due on the sale of the family home. If you give away your home to your children (including adopted, foster or stepchildren) or grandchildren RNRB applies, and your threshold will increase to £500,000 (£325,000+£175,000)
Transferable main residence allowance
As of April 2017, the Government introduced a new transferable main residence allowance to help people pass on property to their descendants.
Initially, this was set at £100,000, but has since risen to £175,000. When added to the IHT threshold of £325,000 it will allow each individual to pass on £500,000 with no tax payable. Married couples and civil partners are allowed to combine this for the property, giving a total tax-free limit of £1,000,000.
Inheritance tax planning guide
We’re here to help at this difficult time. Nobody enjoys this time in life and we can advise on what’s going to be the best course of action to benefit you and your loved ones. We can help with the following inheritance tax planning options:
- Ensure you make the most of relevant tax reliefs
- Work out the correct and most appropriate amount of inheritance tax you will pay
- Utilise lifetime transfers to reduce tax burden on inheritance tax value
- Provide information on estate structure to maximise value passed to descendants
- Ultimately, our advice is bespoke and catered to your unique position.
If your loved one has died very recently, call us today as there may be ways we can reduce the inheritance tax burden immediately. We know this is the last thing you want to be thinking about but it is an important discussion to have. We will be understanding, professional, and most importantly, human.
To discover more about the services that WKM Accountancy Services offers, visit our services page.