ARTICLE · 09 JANUARY 2017

Inheritance Tax Windfall For The Government?

Clifton Ingram LLP

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Second, the allowance is only available on legacies to direct lineal descendants, meaning childless couples will not have the benefit of an increased allowance.

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Financial services company NFU Mutual has reported that there could be a rise to almost 500,000 millionaires in the UK this year based on HMRC data. This growth in wealth will push more people into the Inheritance Tax bracket whilst the Nil Rate Band for tax remains frozen at £325,000 until 2021. As a result, Inheritance Tax planning is becoming a major issue for more and more people in this country.

Tax payers will benefit (so long as they are married) from the new Inheritance Tax Free Allowance for family homes, being introduced from April 2017. This will amount to £100,000 per tax payer (i.e. £200,000 for a couple) rising to £175,000 in 2020, on top of the Nil Rate Band of £325,000.

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