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Wetherby 01937 583210
Malton 01653 692247

Is your Will as tax efficient as it can be?

21 May 2019 Written by Ware & Kay Solicitors Category: Wills and estates

Nobody likes to pay any more tax than is necessary. We can help you to ensure your Will is as tax efficient as possible.

Inheritance Tax (IHT)

IHT is charged on your death at 40% on the value of your assets which exceed your tax allowances. Individuals currently have a nil rate band (NRB) allowance (of £325,000. In April 2017, an additional allowance was made available if your family home is left to your Direct Descendants. This additional allowance is called the residence nil rate band (RNRB)

Rate of RNRB

The RNRB is currently worth an extra £150,000 and it will be increased to £175,000 from 6th April 2020. It is not available for estates of over £2.2 million. However any unused RNRB can be carried forward for use in the estate of a surviving spouse or civil partner. By 2020 a married couple could have £1 million of allowances.

Who is classed as a direct descendant?

Child, grandchild or other lineal descendant, their spouses or civil partners. Step children, Adopted and Foster Children can also qualify.

Can I leave my residence to my spouse and still claim the allowance?

Yes you can. There is no IHT on gifts between spouses. Providing your Will is worded correctly your unused RNRB can be transferred to the surviving spouse’s estate and their executors may have two allowances to use.

Review your Will

It is therefore important to review your Will (or make one if you don’t have one) to make sure that your family can claim the RNRB and they do not miss out on this important allowance.

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To make, discuss or review your existing Will please contact either Laura Schofield or Sarah Collier in Ware & Kay’s Wetherby office on 01937 583210.

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