Inheritance tax is due to change in April. Currently, everyone is allowed to leave an estate valued at up to £325,000 without paying tax on it. This is a called a nil rate band. Anything you leave above that amount is charged at 40%.
There is a tax free ‘main residence’ band being introduced in April 2017 and is for those people leaving their main residence to their direct descendent. This new allowance Is being phased in this year starting at £100,000 in addition to the £325,000. It will increase by £25,000 each year after this one so by 2020 the band will be £500,000 for single people if they are leaving their main residence to their children.
For couples the nil band which is currently is £650,000 will increase to £850,000 in April 2017 and to £1m by 2020.
For anyone concerned about inheritance tax making a will is crucial and ensures that they have control over their money once they’re gone.