Member Article

Asset protection expert offers advice

One of the headline announcements of the recent summer Budget is the Government’s increase of the inheritance tax (IHT) allowance to £1million per married couple.

Before the changes, an individual was entitled to leave assets up to £325,000 to their beneficiaries IHT free and married couples were able to transfer any unused allowance to the survivor – up to £650,000 of assets could be left to their chosen beneficiaries without paying IHT.

The recent changes will provide individuals with an additional IHT free ‘family home allowance’ of up to £175,000 when a residence is passed on death to direct descendants. The allowance is transferable between spouses and by 2020, a married couple will be able to leave a house worth up to £1million to their children without incurring IHT.

Clive Pointon, Head of Wills, Trusts and Tax at leading regional law firm Aaron & Partners and a specialist in tax saving and asset protection, said: “It is important to note that there are some technicalities to be aware of; the additional allowance will be introduced in stages so that £100,000 will be available in 2017 to 2018; £125,000 in 2018 to 2019; £150,000 in 2019 to 2020; and £175,000 in 2020 to 2021. The allowance can still continue to be claimed for if a person downsizes or stops owning their own home on or after 8 July 2015, and if the assets of an equivalent value are passed on death to their direct descendants.

“What’s more, the current nil-rate band of £325,000 has been frozen until 2021.”

Indeed, the changes provide the opportunity for reduction in the IHT paid for parents who own a family home worth over £650,000 and who plan to leave it to their children. However, there are a number of technicalities that families will need to consider and where professional advice should be sought.

For further advice please contact Clive Pointon of Aaron & Partners via email: clive.pointon@aaronandpartners.com

ENDS

This was posted in Bdaily's Members' News section by carly Lunt .