On 8th July HMRC issued a statement setting out some of the detail about this proposal. The Devil is certainly in the detail!
Even now we will have to await the legislation before some details become completely clear.
A number of points have however become clearer.
The additional nil rate band (ANRB) will only apply when a residence is passed on death to a direct descendant. Direct descendant will be a child (including a stepchild, adopted child or foster child) of the deceased and their lineal descendants.
The property has only to have been the residence of the deceased “at some point” and be included in their Estate. If you own more than one property at your death then your Executors can choose to which property the relief is to apply. The relief can only be offset against one property and not split between a number of properties. No definition of “residence” is yet available but it will no doubt require some degree of permanency or at least the intention of permanency.
The Government proposes that the relief will still be available if the deceased has “downsized” or sold their only residence during their lifetime. Once again how this will operate in practice is unknown.
The relief will only be available from 5th April 2017 and will then be worth £100,000, increasing, in stages, until it is worth £175,000 from 5th April 2020. In the meantime the existing nil rate band (of £325,000) will remain frozen until April 2021.
If however a person downsizes or ceases to own a home on or after 8th July 2015 the ANRB will still be available in respect of deaths after 6th April 2017.
The relief will be transferable between spouses and civil partners – presumably in the same way as the existing transferable nil rate allowance. A claim to the transferable allowance will have to be made in the usual way.
The relief is further restricted in the following ways:-
Conclusion
The relief is certainly not as simple as was suggested in the initial announcement.
There is a significant amount of detail which is still unclear. It is not clear whether the relief will apply to properties, or a share in a property, that is owned by a trust but, because of the way in which Inheritance Tax works, we believe this may be the case.
Given the various restrictions the relief will be of limited benefit.
If you or your parent(s) have sold a property it will be sensible at this time to ensure you keep a copy of the statement giving details of the sale price etc as well as copies of Council Tax and other utility bills where possible and other mail as evidence of occupation. This should help in any future claim for the relief.
The Tory Party first talked of introducing a £1,000,000 nil rate allowance in 2008. It will be over 12 years before they fulfil that “promise” and even then it will be subject to many restrictions.
Contact Alex Elphinston, Donna Holmes or James Hall.
We are delighted to announce that our private wealth law department has continued to maintain its Band 2 position in the latest edition of Chambers and Partners High Net Worth.
The new CHF is set to launch and open for applications with £4 million set to be allocated to community-led housing groups to support an increase the supply of affordable housing in England.
Charities, like other organisations, may be subject to or choose to voluntarily comply with the reporting requirements under the Modern Slavery Act 2015.
The draft regulations making it mandatory for anyone entering a registered care home in England to have been double vaccinated unless they are clinically exempt were made on 22 July 2021.
In the Transforming Public Procurement Green Paper, the Government signalled its desire to increase its control over procurements by all contracting authorities.
The monthly round-up from the Anthony Collins Solicitors charities team.
Legal updates as the UK enters into stage 4 of the roadmap and legal restrictions on face coverings and social distancing are lifted.
The first disability we are going to discuss is diabetes. We begin by discussing the different types of diabetes; their similarities and differences and how we live with the disability within our day.
Tim Coolican and Freya Cassia explore the legal and practical options available to providers if a disappointing result is received following an inspection.
Following the launch of the CQC’s new strategy for how it regulates health and social care, many providers will be keen to know more about how the changes might affect them in the future.
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