15th March 2017
The residence nil-rate band, also referred to as the ‘family home allowance’, will come into effect from 6 April 2017.
The allowance is an addition to the £325,000 nil-rate band for inheritance tax and will apply to those passing on a home to a direct descendent.
The band begins at £100,000 for 2017/18 and will increase by £25,000 each tax year until it reaches £175,000 in 2020/21.
|Tax year||Residence nil-rate band||Individuals: maximum nil-rate band||Married couples and civil partners: maximum nil-rate band|
Married couples or those in a civil partnership can pass on any used allowance to their spouse or partner.
The band will only apply if you pass on a property to a direct descendent such as a child, grandchild or other lineal descendent.
The band is also limited to just a single property so if you own one residential property and have also lived in it, it can be eligible for the allowance.
Contact us today to discuss the residence nil-rate band.