Residential Nil Rate Band – Planning actions for estates worth more than £2,000,000

Those with estates worth over £2,000,000 will begin to lose out on the new Residential Nil Rate Band. The new allowance is ‘tapered’ away at a rate of £1 for every £2 that your estate is over £2,000,000.

For example, if your estate was worth £2.1m, you would lose £50,000 of the new Residential Nil Rate Band.

While this is clearly unwelcome news for those with larger estates, it does present some significant planning opportunities.

For example, if a couple had an estate worth £2.2m, they would lose £100,000 of their Residential Nil Rate Band, increasing their inheritance tax bill by £40,000.

If considered planning via trusts or qualifying investments was used to bring the estate back under £2m, not only would the £200,000 excess be outside of the estate for tax purposes, but the full Residential Nil Rate bade could be re-claimed.

Estates of this size should also consider other estate planning and succession actions to ensure that the maximum value can be passed down to future generations.

Our estate planning seminars cover all of the topics outlined above, as well as some other innovative methods by which you can preserve and protect your estate. The events are free to attend and you can book your place here.