Residence Nil Rate Band

Using the Residence Nil Rate Band can significantly reduce the amount of inheritance tax payable on your estate.

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How does the Residence Nil Rate Band (RNRB) work?

If someone dies on or after 6 April 2017 and their estate is above the basic Inheritance Tax threshold of £325,000, and includes a property, the estate may be entitled to an additional threshold before any inheritance tax becomes due.

The threshold is to increase yearly as follows:

2017 to 2018 £100,000
2018 to 2019 £125,000
2019 to 2020 £150,000
2020 to 2021 £175,000

Example:

Individual A dies between April 6 2018 and April 5 2019, his estate is worth £500,000, included within this is a property valued at £350,000 (enabling the nil rate residence relief to be utilised).

   £        £
 What relief is available to Partner A?    
 Estate Value    500,000
 Basic Inheritance Tax Threshold  325,000  
 2017 to 2018 RNRB  125,000  
 Total Tax free threshold   (450,000)
 Remainder of taxable estate      50,000       @ 40% = £20,000 Inheritance Tax Liability

 

For a married couple, both reliefs are passed on to the surviving spouse upon death - There is no inheritance tax on an estate passed between married couples and civil partners.

For more information visit our inheritance tax page.

If you are interested in becoming a client of Morris Crocker, contact us on 02392 484356 or alternatively you can complete the request a quote form above.

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