Thackray Williams, a firm of solicitors that covers the Bromley area, has sought to clarify the changes that were made to the inheritance tax system in the recent budget. Before the election, the Conservatives made these alterations one of the points in their manifesto.
The Government has agreed to freeze inheritance tax at the current £325,000 threshold until April 2021. This means that this level will have remained the same for 12 years.
They are also phasing in an additional direct descendant nil-band to increase the amount of money that is exempt from inheritance tax. This means that if you pass on your home to your children (including adopted, foster, or step children) or grandchildren, you won’t pay inheritance tax up to a certain amount. This additional level will start at £100,000 from April 2017; by 2020, it will have increased to £175,000.
The Government has announced that this benefit can still be claimed if someone sells their home or downsizes as long as it took place from 8th July 2015. The full details of these arrangements will be confirmed in September, but it will only apply to deaths from 6th April 2017 and will be phased in fully over three years.
These changes add an additional level of complexity to the inheritance tax system, so it is vital that you get the right advice and see how this will affect you.
What do you feel about the changes to inheritance tax? Will it have an impact on your estate when you pass away?