Budget 2017 – IHT

Inheritance Tax (IHT)

Yet again, no mention of IHT in the budget, so nothing new to announce.  The nil rate band remains at £325,000.

The previously announced Residence Nil Rate Band (RNRB) will be phased in from 6 April 2017 at an additional rate of £100,000, rising to £175,000 by 6 April 2020, so that by 6 April 2020, a couple could leave up to £1m without any IHT being payable.

The RNRB will increase in line with Consumer Prices Index (CPI) from 2021-22 onwards. Any unused proportion of the RNRB will be able to be transferred to a surviving spouse or civil partner irrespective of when the first of the couple died.

As a reminder, the RNRB will apply when people pass their home down to a direct descendant on death.

The RNRB will also be available when a person downsizes or ceases to own a home on or after 8 July 2015 and assets of an equivalent value, up to the value of the RNRB, are passed on death to direct descendants.  The qualifying residential interest will be limited to one residential property but personal representatives will be able to nominate which residential property should qualify if there is more than one in the estate. A property which was never a residence of the deceased, such as a buy-to-let property, will not qualify.

Where an estate has a value of more than £2m (before reliefs such as business property relief and agricultural property relief), the RNRB will be withdrawn at a rate of £1 for every £2 over this threshold.

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Feb 20

No events today
We changed from our old accountants to Dodd & Co last year and not only did you offer the accountancy service for a cheaper fee than our previous accountants, but you have proved to be more pro-active in giving advice. We were recommended that we change the way we account for VAT and although this is not a huge saving per year, it is better in our pockets than the VAT man's. The main saving to ourselves is the time taken to complete the VAT returns. It was also suggested that we consider becoming a Limited Company rather than a Limited Liability Partnership and we are going to do this at the end of our financial year. This will save us more money, as it will reduce our yearly tax bills. We would recommend using Dodd & Co to any of our clients (or yourselves) and plan to do so in the future.
-- A L Robinson, Johnstons