George Osborne has, this week, announced a change in the inheritance tax allowance which, by April 2020, will allow a couple to pass on their main property with a value of up to £1million to their children or grandchildren without paying any inheritance tax. A word of warning. This applies only to houses left to the children. It does not apply to other family assets.
For the majority of our clients the introduction of the “family home allowance” for a person's main home will be a positive change. Many people worry that, on death, their house will have to be sold to pay the tax on it. The new allowance will reduce this risk allowing parents to pass their house on to the next or future generations.
For those living in London and the South where, compared to the rest of the country, house prices are higher and rising quickly, this change is particularly welcome. Most welcome is the “inheritance tax credit”, allowing an individual or couple to down-size their home in their retirements, as many plan to do, and still benefit from the tax relief on the value of the sold property.
It is important for people to review their Wills and tax planning measures to ensure that they are taking advantage of this new allowance and have structured their assets accordingly.
If you have any questions regarding the changes or would like to review your Will please call our Private Client Team on 01722 412 512 or you can submit an enquiry through our website www.trethowans.com