People in this category stand to gain significantly from the new legislation, however careful planning is required to ensure that you gain the maximum benefit.
Estates of this size are likely to be facing an inheritance tax liability, despite the introduction of the Residential Nil Rate Band, however this should be significantly reduced.
Some wills created historically contained what is known as a ‘nil rate band’ trust. The use of this type of trust has the potential to cause the Residential Nil Rate Band to be lost, as the transfer of the assets would be to the trust and not to direct descendants. It would be good practice to review you will for the presence of a nil rate band trust.
Your direct descendants (i.e children or grandchildren) will need to be the ones who inherit the residential home to qualify for the new relief. Does your current will meet these criteria?
Consideration should be given to other inheritance tax planning actions that could reduce the inheritance tax liability further or eliminate it altogether. This could include the use of lifetime trusts or qualifying investments.
Our estate planning seminars cover all of the above topics in detail and are free to attend. You can book your place here.