Where this fits
Whether your estate qualifies, and whether it tapers, changes almost every other answer about it.
Sunny Bharj
Independent Financial Adviser
Tony Springer
Independent Financial Adviser
It is an extra inheritance tax allowance of up to £175,000, available where a residence you lived in passes to direct descendants. It sits on top of the ordinary £325,000 nil rate band and tapers away above a £2m estate.
Like the ordinary nil rate band, an unused residence band transfers to a surviving spouse or civil partner. It transfers as a percentage of the band unused on the first death, not as a cash figure, so it keeps pace with any future increase in the band.
The point that is regularly missed: where the first estate was large enough for the band to taper, the percentage available to transfer is reduced as well. Two full bands are not automatic.
Where the first estate was large enough for the band to taper, the percentage available to transfer is reduced as well. Two full bands are not automatic.
There are downsizing provisions for anyone who sold or moved to a less valuable home after 8 July 2015, so the band is not automatically lost. The rules are detailed and worth checking against your own circumstances.
It depends on the type of trust. Some trusts for children qualify, others break the entitlement entirely. This is a common and expensive mistake in home-made wills.
The residence band is not available, so the ordinary £325,000 is the allowance, transferable between spouses in the usual way.
Broadly yes, or to have done so and be relying on the downsizing provisions. There is no requirement to have lived there at the end.
Whether your estate qualifies, and whether it tapers, changes almost every other answer about it.
Independent Financial Adviser
Independent Financial Adviser
A first conversation of about twenty minutes, at no cost to you. Tell us what is on your mind: a pension you have lost track of, a fixed rate ending, a will you keep meaning to write.