Residence Nil Rate Band


The freezing of the Inheritance Tax (IHT) threshold at £325,000 and the continuing upward movement in house prices has the potential to bring increasing numbers of estates within range of tax.

The Office for Budget Responsibility (OBR) recently warned that annual Inheritance Tax (IHT) receipts are on track to exceed £6.2bn within the next five years.

Prior to 5th April this year, IHT was payable on assets passing on death at a rate of 40 per cent, with each individual entitled to a Nil Rate Band (NRB) of £325,000. Property passing to a surviving spouse is exempt and any NRB unused on the first death can be claimed on the second giving an aggregate bottom slice exemption of £650,000.

Following the implementation of new measures from 6 April this year, additional relief is available in instances where property passes to children and grandchildren on death.

The new additional residence nil rate band (RNRB) enables individuals to pass on an additional £100,000 worth of property to certain ‘qualifying beneficiaries’. This will increase by £25,000 each year, until it finally reaches £175,000 in 2020.

The criteria for this relief are unusually narrow, applying only to a house or flat passing to child or children from within an estate not exceeding £2m in total. This provides scope for careful planning and pitfalls for the unwary.

Carter Lemon Camerons LLP Solicitors is a City law firm which provides Wills and probate services with a personal touch to its clients – that go beyond the simple drafting of documents. Unlike many City practices we are happy to act in smaller private legal matters, bringing the same care and consideration as we do to large commercial matters. If you require advice on Wills, please contact Neil Acheson-Gray, Ian West or Michael Woodward.

Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInPrint this pageEmail this to someone

Information for Editors
Carter Lemon Camerons LLP (CLC) solicitors is a City law firm which provides legal services with a personal touch to both commercial and private clients. Unlike many City practices we are happy to act in smaller private legal matters, bringing the same care and consideration as we do to large commercial matters. For more information about CLC please visit: www.cartercamerons.com or telephone: 020 7406 1000