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of more than £2m (before reliefs such as business property relief and agricultural property relief), the RNRB will be withdrawn at a rate of £1 for every £2 over this threshold.

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Oct 21

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-- Ghyllmount Dental Practice