The nil-rate band of £325,000 per person will remain frozen until at least 2021/22, but the new tax year sees the phased introduction of the residence nil-rate band, an additional tax allowance that applies to the value of family homes left to direct descendants.
The new residence nil-rate band is £100,000 per individual in 2017/18, but will rise to £175,000 in 2020/21. A combination of the standard nil-rate band and the new residence nil-rate band means that married couples with children could pass on up to £1 million free from Inheritance Tax.
However, not everyone will benefit. For instance, estates worth more than £2 million will see the new allowance gradually tapered away.
The rules are complex and could have a significant impact on estate planning and how people structure their Wills.
What hasn’t changed is the opportunity for those with estate planning needs to make gifts of up to £3,000 each year, providing a way to give loved ones a financial boost and the chance to see them enjoy it.
The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.
The writing of a Will involves the referral to a service that is separate and distinct to those offered by St. James's Place. Wills are not regulated by the Financial Conduct Authority.