Don’t miss out on valuable property reliefs on death
The residence nil rate band (RNRB) is now fully in force and provides an inheritance tax exemption of £175,000, a tax saving of £70,000.
Those that have been widowed may also be able to claim the transferable spouse RNRB, bringing the total tax savings up to £140,000.
Unfortunately, in many cases we are seeing the estate being denied this valuable relief as a result of lifetime planning. This planning, far from saving tax on death, has actually made the position worse. If the legislation conditions have not been carefully considered and complied with, in some cases the property gifted during lifetime comes back into the charge to tax in full, but without the benefit of the RNRB – with effective tax implications of 80%!
If no lifetime planning has been undertaken in relation to the family home, the RNRB can be easily achieved in a will by ensuring the home is left to lineal descendants (e.g. children/grandchildren).
If lifetime planning has been undertaken with the family home, we would recommend you revisit this to confirm the planning meets its intended outcome.
For further information on property reliefs on death, please contact Gemma Hedges on 023 8046 1259.