We’ve all come across people who in later life have decided to move to a smaller property, “now the kids have moved out” or “we don’t need the space, it’s too much work”, but how are these people affected when it comes to the new Inheritance Tax rules for leaving their home in their Will?
From April 2017 as you may have read in my earlier article, HMRC introduced the new Residential Nil Rate Bond (RNRB) starting at £100,000 and increasing to £175,000 by 2020/21.
This relief against
HMRC have covered this by introducing “downsizing provisions”.
If before 8 July 2015, the previous home would have been eligible for the RNRB and any sale or gift happened later, then additional relief will be available equal to the amount lost. If, however, this is before 5 April 2017 then the maximum additional relief is £100,000.
There are a number of scenarios which can arise and we will be happy to review your own personal circumstances to ensure that you understand your position and can make alterations if necessary.
Remember the RNRB also has the ability to be transferred between spouses or civil partners on death, if the property is transferred under the spousal exemption. This ensures your spouse or civil partner is not affected detrimentally.
Please contact our Inheritance Tax Specialist, Lucy
Disclaimer
The views expressed in this article are the personal views of the Author and other professionals may express different views. They may not be the views of Lambert Chapman LLP. The material in the article cannot and should not be considered as exhaustive. Professional advice should be sought in connection with any of the issues contained in the article and the implementation of any actions.