insideKENT Magazine Issue 41 - August 2015 | Page 164
Inheritance tax and the family home
What it means for you
Following George Osborne’s
ďƵĚŐĞƚŽŶϴ:ƵůLJ͕ĚƌĂŵĂƟĐ
ĐŚĂŶŐĞƐŚĂǀĞďĞĞŶĂŶŶŽƵŶĐĞĚƚŽ
ƚŚĞŝŶŚĞƌŝƚĂŶĐĞƚĂdžƚƌĞĂƚŵĞŶƚŽĨ
ƚŚĞĨĂŵŝůLJŚŽŵĞ͘dŚĞƐĞĐŚĂŶŐĞƐ
ŝŵƉůĞŵĞŶƚĂŵĂŶŝĨĞƐƚŽƉůĞĚŐĞ
ŵĂĚĞďLJƚŚĞŽŶƐĞƌǀĂƟǀĞƉĂƌƚLJ
ƉƌŝŽƌƚŽƚŚĞůĂƐƚĞůĞĐƟŽŶ͘
dŚĞĮƌƐƚƉŽŝŶƚƚŽŶŽƚĞŝƐƚŚĂƚƚŚĞ
current inheritance tax threshold of
άϯϮϱ͕ϬϬϬǁŝůůďĞĨƌŽnjĞŶƵŶƟůƉƌŝů
ϮϬϮϭ͕ŵĞĂŶŝŶŐƚŚĂƚŝƚǁŝůůŚĂǀĞ
ƌĞŵĂŝŶĞĚƵŶĐŚĂŶŐĞĚĨŽƌϭϮLJĞĂƌƐ͘
dŚĞŽŶƐĞƌǀĂƟǀĞƐŚĂǀĞŚŽǁĞǀĞƌ
introduced the concept of an
ĂĚĚŝƟŽŶĂůŝŶŚĞƌŝƚĂŶĐĞƚĂdžŶŝůͲƌĂƚĞ
band (“NRB”) which can be claimed
when a family home is passed on
death to a “direct descendant” –
namely a child, step-child, adopted
or foster child and/or their own
ŽīƐƉƌŝŶŐ͘dŚŝƐĂĚĚŝƟŽŶĂůEZǁŝůů
be phased in over four years, with
άϭϬϬ͕ϬϬϬĂǀĂŝůĂďůĞĨƌŽŵƉƌŝůϮϬϭϳ͕
ŝŶĐƌĞĂƐŝŶŐƚŽάϭϳϱ͕ϬϬϬďLJƉƌŝů
ϮϬϮϬ͘dŚĞƌĞĂŌĞƌŝƚǁŝůůŝŶĐƌĞĂƐĞ
in line with the Consumer Prices
Index.
Many clients have been
concerned that the sale of their
property or a move to a smaller
home would result in the loss of
ƚŚŝƐĂĚĚŝƟŽŶĂůďĞŶĞĮƚ͘dŚŝƐĚŽĞƐ
not appear to be the case, although
exactly how the Government will
ĞŶƐƵƌĞƚŚĂƚƉĞŽƉůĞŝŶƚŚŝƐƐŝƚƵĂƟŽŶ
ĐŽŶƟŶƵĞƚŽďĞŶĞĮƚĨƌŽŵƚŚĞŶĞǁ
rules will only be known in
September, following the
ƉƵďůŝĐĂƟŽŶŽĨĂĐŽŶƐƵůƚĂƟŽŶŽŶ
this subject. All we know now is
ƚŚĂƚŝƐƚŚĂƚƚŚĞĂůůŽǁĂŶĐĞǁŝůůƐƟůů
be available if a person downsizes
or ceases to own a home on or
ĂŌĞƌϴ:ƵůLJϮϬϭϱƉƌŽǀŝĚĞĚĂƐƐĞƚƐŽĨ
an equivalent value are passed on
death to direct descendants.
This allowance will not be
available immediately. It only
ĂƉƉůŝĞƐƚŽĚĞĂƚŚƐŽŶŽƌĂŌĞƌϲ
ƉƌŝůϮϬϭϳ͕ĂŶĚǁŝůůŽŶůLJďĞĨƵůůLJ
ŝŵƉůĞŵĞŶƚĞĚďLJϲƉƌŝůϮϬϮϬ͘dŚĞ
Government will therefore have
ĨƵůĮůůĞĚƚŚĞĞůĞĐƟŽŶƉůĞĚŐĞƚŽ
ďƌŝŶŐŝŶƚŚŝƐĂĚĚŝƟŽŶĂůďĞŶĞĮƚ
ĚƵƌŝŶŐƚŚĞůŝĨĞƟŵĞŽĨƚŚŝƐ
Parliament, but clearly at the
ůŽǁĞƐƚƌĞĂůŝƐƟĐĐŽƐƚƚŽƚŚĞ
Exchequer.
dŚĞƌĞŝƐĂŶŽƚŚĞƌƐƟŶŐŝŶƚŚ