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On 6th April 2017 the new ‘residential nil rate band’ came into effect. When it was initially announced, it was widely reported that for some, it would (eventually) be possible to give away up to £1,000,000 of your estate on death without being subject to any Inheritance Tax (IHT). If only it were that simple. Firstly the reports are misleading in that this level of relief will not be available until April 2020, and secondly, they will only be available to certain people – so who actually benefits from this new relief?
The Small Print – there are other restrictions that apply to this relief, relating to when the property is left in trust, when estates are worth over £2,000,000, and when downsizing during your lifetime.
In summary – the new rules don’t quite -necessarily allow you to give away £1,000,000.00 without incurring any inheritance tax liabilities, but they do allow for parents and grandparents to gift away more of their estate than they were previously able to, before any inheritance is payable. For many families, this will mean more assets passing to their loved ones, and less going to HMRC.
If you think you might benefit from this new tax relief, and would like to discuss how it might effect your Will or your Estate Planning, please contact one of our Wills and Probate Solicitors on 01270 625478.
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