Guidance on new IHT-free family home allowance
HMRC has issued guidance on the inheritance tax (IHT)-free allowance for family homes bequeathed to direct descendants on or after 6 April 2017.
From 6 April 2017, the residence nil-rate band (RNRB) will provide an extra IHT-free allowance for family homes passed to direct descendants such as children, grandchildren, step-children, adopted or foster children and in some cases the spouse or civil partner of a direct descendant.
The maximum RNRB allowance for estates worth £2 million or less will rise yearly as follows:
- 2017 to 2018 – £100,000.
- 2018 to 2019 – £125,000.
- 2019 to 2020 – £150,000.
- 2020 to 2021 – £175,000.
These figures ‘top up’ the standard £325,000 threshold on all assets, above which an individual is taxed at 40 per cent. For estates worth more than £2 million the tax relief will be tapered away. Beyond the 2020/21 tax year, the maximum RNRB allowance will rise in line with inflation based on the consumer price index.
Expert wills and probate solicitors in East Sussex
For expert advice on will-writing and estate-planning please contact one of our specialist wills and probate solicitors:
- Jonathan Midgley 01424 730945
- Gordon Howard-Smith 01424 438011
- Antony Caulfield 01323 435 900
- Richard Ostle 01424 730 945
- Cara Sheppard 01424 730 945
Posted: 13 December 2016
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