Specialist advice could help you find ways to reduce inheritance tax (IHT).
Inheritance tax could be payable on the portion of your estate worth over a certain threshold. Everything you own – from your home and savings to other items like cars, jewellery and investments minus any debts – contributes to the value of your estate. It’s possible your home on its own could exceed current tax-free thresholds, which are:
- up to £325,000 (if you’re single or divorced)
- up to £650,000 (if you’re married, in a civil partnership or widowed).
Main residence nil-rate band: will it help you?
Since April 2017, HM Revenue & Customs has gradually started to introduce an additional new ‘main residence nil-rate band'. This is worth £125,000 per person for the 2018/19 tax year, and will be worth up to £175,000 per person by 2020. However, there will be a number of restrictions over how this allowance can be used, so not everyone can benefit.