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 in your local area please contact us on 0115 824 0555 or email us via our contact form below.
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