As of 6th April 2017, a new inheritance tax relief will be introduced which will save families money in respect of disposal of their property – the Residence Nil Rate Band (RNRB).
The RNRB will apply where a property is left to lineal descendants on death. Lineal descendants includes children, grandchildren and great grandchildren as well as step-children and foster children.
The disposal of the property can either be by way of a Will or under the intestacy rules. The property can be left as a stand-alone gift or can be included as part of a residuary gift. Basically as long as lineal descendants inherit the property one way or another, the RNRB will apply. There is one exclusion to this, however, which is if the property is held as part of a discretionary trust within a Will.
From 6th April 2017, a new inheritance tax relief was introduced which will save families money in respect of disposal of their property – the Residence Nil Rate Band (RNRB).The RNRB will apply where a property is left to lineal descendants on death. The disposal of the property can either be by way of a Will or under the intestacy rules and the property can be left as a stand-alone gift or can be included as part of a residuary gift.As of April 2017, the value of the relief will be £100,000. This amount will increase by £25,000 per year up until 2020 when it will reach £175,000. After this, any increases in value will be in accordance with inflation. It should be noted that if an estate is worth over £2million, the relief will be reduced proportionately.This new allowance is on top of the normal inheritance tax allowance of £325,000 per person so by 2020 a married couple may have up to £1million of allowance before tax becomes due.
