Will there be inheritance tax changes post-Brexit?

It was announced in the 2015 Summer Budget that a new residential nil rate band would come into effect in regard to deaths on and after 6 April 2017.

In brief, it is currently intended that the amount that can be passed on tax free on death will become £425,000 per person and it will be made up of the standard £325,000 nil rate band, with the addition of the new £100,000 residential nil rate band, to be applied to the main residence. This residential nil rate band will increase by increments each tax year until the tax free allowance becomes £500,000 per person in 2020/21, made up of £325,000 nil rate band and the new residential nil rate band of £175,000.

The rules are, however, quite complex and will not apply to every estate. The new residential nil rate band will only apply if your residence is being passed to your direct descendants i.e. children, grandchildren etc. Therefore, those with no children or those who do not own property would not benefit from the residential nil rate band.

These changes were, of course, planned by David Cameron’s government. Now that we have a new Prime Minister and Chancellor, it will be interesting to see whether they stick to the proposed changes.

If you would like further information about Inheritance Tax, please see the gov.uk website https://www.gov.uk/inheritance-tax/overview or contact one of our solicitors in the Wills & Probate department:-

Florence Nevill- fn@hpwsolicitors.co.uk

Outi Hubbard- oh@hpwsolicitors.co.uk