WE ARE HOLDING A COFFEE MORNING ON THE 28TH SEPTEMBER 2016
from 10:00am to 1:30pm
IN SUPPORT OF RAISING MONEY FOR MACMILLAN CANCER SUPPORT
Most of us have been affected by someone with Cancer. Please come along and join us to help raise money and give a little back to help continue the wonderful work that Macmillan do.
The Team at BACHES Solicitors will also be on hand to provide specialist advice to you and your family. Our team can assist you with:-
To find out more or donate to this wonderful cause please contact Baches Solicitors on
Phone: 0121 553 3286 Email: firstname.lastname@example.org
In April 2017 new legislation comes into force which was widely reported to allow families to leave up to £1 million worth of assets, on their death, free of tax. This almost sounds too good to be true, is it?
At the moment each individual is able to leave £325,000 free of tax to anyone, this is referred to as a nil rate band and has not been changed by the new legislation. Married couples/Civil Partners can share their nil rate band and can therefore leave £650,000 to anyone before there is any tax to pay on their estate. Where does the £1 million come from you may ask…
The new legislation has introduced a RESIDENCE nil rate band. This means that in addition to the £325,000 nil-rate band above we now also have some relief from inheritance tax on your main home. There is however some red tape to overcome. Firstly you must have lived in the property at some point in your lifetime (the relief does not therefore apply to buy-to-let properties). Secondly you must leave the property to a direct descendent, this means your children, their lineal decedents or their spouses and finally your estate must be under £2 million (different rules apply to estates over this amount).
You are currently allowed £100,000 on top of your £325,000 nil rate band, there is a promise to increase this yearly as listed below;
2017-2018 – £100,000
2018-2019 - £125,000
2019-2020 – £150,000
2020 – 2021 - £175,000
As with before you can use your spouses’ unused residence nil rate band as well as your own.
Bob and Margaret are married. Bob passes away in 2017 leaving everything to Margaret. Margaret dies in November 2018 leaving her estate to her children. When she passes away her estate is worth £650,000 in cash and the matrimonial home worth £300,000.
Before April 2017
Margaret’s children would have received the £650,000 free of tax. This is because she is entitled to leave up to £325,000 to anyone without their being any tax to pay. She can use Bob’s £325,000 as he left his entire estate to her there was no tax to pay (any money you leave to a spouse is free of inheritance tax). However her estate would pay inheritance tax on the additional £300,000 in her estate at a rate of 40% leaving a tax bill of £120,000.
After April 2017
Margaret can still leave the £650,000 free of tax to her children as above. In terms of the property which is worth £300,000. She has £100,000 from Bob’s unused residence nil rate band and £125,000 from her own residence nil rate band. Consequently she can leave the £650,000 and £225,000 of the value of the property free of tax. Her estate will only pay tax on the £75,000 value of the property (£300,000-£225,000 residence nil rate band) at a rate of 40% which leaves a reduced tax bill of £30,000.
As a result of the changes you may wish to make a Will so you can benefit from leaving your property to your lineal descendants or obtain specialist advice if your estate is over £2 million.
If you wish to discuss the impact of the new legislation on your estate please contact our experienced Wills and Probate team on 0121-553-3256.
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