IHT allowances 2015 and beyond
George Osborne’s 2015 Budget speech contained 2 announcements about IHT allowances. Cynics might think Government Press Releases which have lead to wide reporting of a proposed new allowance were designed to bury some bad news.
The current IHT allowance of £325,000 took effect in April 2009. This year’s Budget means any increase in that figure has now been ruled out until April 2018 at the earliest. In real terms this will increase the amount paid by Inheritance Taxable estates.
The proposed new allowance relates to the value of someone’s share in their main residence. The allowance is also intended to extend to the crystallised proceeds of sale of that share if still part of someone’s estate when they die. The rules have yet to be enacted, but it’s clear that there will be various conditions of which the most noticeable is that only “direct descendants” can benefit from this allowance. It is to be phased in over 4 years starting in 2017. In the first year it will be worth £100,000 (saving just £40,000 at current IHT rates) and in the fourth year it will have increased to £175,000.
If you haven’t talked to us about your Will and Inheritance Tax planning recently, we shall be pleased to do so. Please call your usual adviser at Cripps Pemberton Greenish, or contact our enquiries team on (01892) 506011 or 506014. We’re here to help.