From 1st April 2017, a new threshold will be introduced to inheritance tax. Sarah Cornish, Head of the Wills Trusts and Probate team at Coodes Solicitors, explains the changing inheritance tax rules and what this means for your Will.
“If you’ve seen the recent headlines, you may well be feeling a sense of relief that your loved ones won’t have the complications of dealing with inheritance tax. The Government is finally changing the rules on inheritance tax and an additional threshold will be introduced in April 2017, but it is complex and sadly not everyone will benefit.
“The new threshold will only apply in certain situations and if your circumstances do not fit the very specific criteria then your estate will not benefit. Firstly, it will only be applied to property and is specific to residential property, so will not cover buy-to-lets. This means that if you are set to inherit an estate from a homeowner, you could now benefit from an additional threshold. However, there are limits on very high value estates and a number of properties in the South East in particular will fall outside the threshold.
“Secondly, it will only apply if you are leaving your estate to particular members of your family. There are complexities, but in short the new threshold will only apply to prescribed family members, including children, step-children and grandchildren. Unfortunately this means that if you don’t have children and, for example, want to leave your estate to nieces and nephews, they will be left with the standard threshold.
“Whatever your circumstances, it is worth reviewing your Will ahead of the changes to ensure your loved ones will get what you want them to have. If you do not qualify for the new threshold because you don’t have children, expert advice could still help you make the best of your situation–this may mean rebalancing your inheritance by dividing your estate between different people. If you are eligible for the new threshold, a lawyer should help ensure your Will is structured in such a way that your loved ones will benefit the most and the threshold will apply.”
For more information on this issue, please contact Sarah Cornish at Coodes Solicitors on 0800 328 3282 or firstname.lastname@example.org