INHERITANCE TAX AND THE FAMILY HOME
Further detail has emerged (in a leak to the Guardian newspaper) concerning a new Inheritance Tax (IHT) allowance announced in the Conservative Party election manifesto to set against the value of the family home.
The proposed new family home allowance provides for an additional £175,000 nil rate band from April 2017, bringing a couple’s combined tax free estate to £1,000,000. This allowance is subject to a taper where the amount being left is more than £2,000,000 with £1 of the family home allowance being lost for every £2 of estate value over £2,000,000. This clawback seems to be based on the value of the estate before reliefs such as business property relief and agricultural property relief and may result in some additional complications and redrafting of Wills.
We will almost certainly see further details announced in the Summer Budget on 8th July and you may wish to arrange a meeting with us to consider the impact on your Will and your family’s inheritance tax position.