Are you aware of the new Residence Nil Rate Band (RNRB) and is your Will compatible?
The inheritance tax threshold has remained unchanged since April 2009 – with each individual being entitled to a nil rate band of £325,000 – HOWEVER the introduction of the new Residence Nil Rate Band (RNRB) in 2017 has changed the goal posts.
ACT today to make sure your Will is compatible or risk losing out on an additional tax free allowance of £350,000 !
What is the RNRB?
The RNRB is potentially available where the deceased owned a home, or share of a home, which is inherited by their direct lineal descendants – such as children or grandchildren.
The RNRB allowance is £125,000 per individual for the tax year 2018/2019 and it will rise to £175,000 on 6 April 2020 – meaning that a couple will potentially have between them a tax free allowance of £1 million.
Are you entitled?
The direct lineal descendants must become immediately entitled to the home in the Will, therefore if there is a condition that they must reach a certain age, the RNRB will be not be available. Similarly if your current Will involves a discretionary trust it may preclude the claim of RNRB.
It is important to review your Will to ensure it is RNRB friendly!
Please call to speak to one of our solicitors today to ensure your estate does not pay £140,000 of unnecessary tax!!