Last month saw the introduction of an inheritance tax (IHT)
threshold top-up designed to help spouses leaving the family home
to children on death with reduced tax charges.
The eye-catching headline is that estates will have a £1
million IHT threshold but the devil is always in the detail. Many
people do not realise the strict criteria for it to apply and
that the £1 million threshold won't apply until 6
April 2020.
IHT is charged at 40% on estates worth more than £325,000
(the nil rate band), or on estates worth more than £650,000
for spouses and civil partners. It is also subject to other
potential factors such as the impact of gifts made in the seven
years before death.
Since 6 April 2017, homeowners can benefit from a family
home allowance allowing them to pass their home on to their
children or grandchildren tax-free or with a reduced tax burden
after their death. This will be phased in with £100,000
applying now, increasing by £25,000 each tax year until
