The Pre-Budget Report of 2007 introduced a welcome change that simplified the steps that need to be taken in order to avoid paying unnecessary inheritance tax (IHT). The change assists married couples and civil partners who are currently entitled to an IHT allowance or nil-rate band (NRB) of £325,000 each.
Essentially, the change allows any unused allowance on the first death to be carried forward and claimed on the second death. Therefore if, for example, a husband dies first leaving his entire estate to his wife, the total allowance that can be claimed against the wife’s estate is now £650,000. This applies to cases where the second death occurs on or after 9th October 2007 – and it does not matter how long previously the first death occurred.
Before the change, the usual method of ensuring that the allowance was fully utilised on the first death was to make a Will including a nil-rate band discretionary trust (NRBDT). This was a fairly sophisticated device adopted by more and more people to offset the IHT effects of sharply increasing property values. NRBDTs are no longer necessary to avoid IHT and although they can be brought to an end quite easily on the first death, those who currently have Wills that include them should consider whether they should be removed so as to avoid complications.
Some reasons remain for including a NRBDT, or some other form of trust, in a Will e.g. to protect part of the estate from charges for long term care or to ensure that children or other nominated beneficiaries inherit on the second death. Trusts that take in assets that qualify for IHT business or agricultural relief on the first death generally remain effective.
We are able to advise on this complex area and assist with all the necessary form filling and data collection.
"This is by far the go-to firm for any issues. You are made to feel valued from the outset and they are so confident in what they do. Wouldn't recommend any other. Thank you Hugh and Max."
- Ros Jones
"I would like to say thank you for your help, support and guidance over the last two and a half years. Obviously should I need further assistance in the future I shall not hesitate to call you guys."
"Domini was very fast and efficient in carrying out her work for me - she was also very good at explaining things to me"
"Jade made the process of buying our first home quick, easy and took the stress out of a new chapter of our lives"
"We found Rachel Dawson outstanding, polite, professional and caring."
"I have used Tracey Laflin at Gotelee on a number of occasions and in my opinion, she is simply the most efficient conveyancing solicitor I have ever worked with. From the outset, she took the time to understand my specific business requirements and to date, she has exceeded all of my expectations."
- Dale Fiddy - Portobello Developments Ltd
"We were very pleased to have Jade as our solicitor, the service was excellent and we felt kept in the loop which minimised stress"
"I don't think this house sale would have pulled together without Jo's determination and expertise. Excellent!"
"“ This is the second time we have used Tracey for the conveyancing to buy our new home. She is always completely approachable, she has helped us along the way with advice and useful tips that has helped lessen the stress. We have complete confidence in her and would not hesitate to recommend her to our friends and family”. - Peter Dawes, Cater Dawes Financial Planning "
"Approachable, very efficient, always willing to take my calls and update me."