What is the main residence nil rate band?
The main residence nil rate band was introduced on the 6th April 2017 and acts as an additional nil rate band when a residence is passed upon death to a direct descendent. The nil rate band is the value of an estate which can pass to beneficiaries without being subject to inheritance tax and is currently set at £325,000. The main residence ril rate band relates to the residence of the deceased and will effectively reduce inheritance tax liability. The main residence nil rate band for the tax year 2017-2018 is £100,000 but this is set to increase to £175,000 by the tax year 2020-2021 and will continue to increase afterwards in line with inflation.
In order for the main residence nil rate band to apply, the death of the deceased must be on or after 6th April 2017, the deceased must own a home or share of a home which is included in their estate and the deceased’s direct descendants must inherit the home or share of the home. For estates in excess of £2,000,000, the value of main residence nil rate band will be reduced.
At Emery Johnson Astills, we have a specialist Wills and Probate Department that can offer you a personal service and sensitive, professional guidance. If you require any advice in respect of dealing with the estate of somebody close, or drafting your Will, please do not hesitate to contact Emery Johnson Astills on 0116 2554855.