If you have set up a ‘Nil Rate Band Discretionary Trust’ in your Will, new Inheritance Tax regulations that are due to come into force in April 2017 may mean that your children miss out.
Families who set up these Trusts in order to leave property tax efficiently are unlikely to benefit from the new ‘family home allowance’ worth up to £350,000 per couple from 2020 because the asset has not passed directly to the children.
The new family home allowance will be available to home owners from April 2017. It will eventually be worth an additional £175,000 per person in 2020. When this is added to the current Nil Rate band of £325,000, this will mean an allowance for property owners of £500,000 - £1,000,000 per couple.
Crucially, to qualify for the allowance, the property must be ‘directly inherited’ by direct descendants. This includes children, stepchildren, adopted and foster children and grandchildren.
If you are unsure, Ward Williams Financial Services Ltd are able to assist. Please contact us on 01932 830664 or firstname.lastname@example.org.