As safe as houses…. more IHT
You have probably heard that the nil rate band or inheritance tax allowance is increasing on a main residence, provided that it is inherited by your family and provided that it isn’t worth too much. As probably intended, many are under the impression that this new “£500,000” allowance has started… it hasn’t and many will not see the benefit.
For starters, the new “Main Residence Nil Rate Band” … MRNRB is being gradually introduced from April 2017 starting with an extra £100,000 rising each tax year by £25,000 until the full extra £175,000 becomes applied from April 2020. However if the net value of the estate is worth more than £2m, then this extra allowance is gradually lost. I think that’s called giving with one hand and taking with the other and of course is ignored by those who think that this is a tax break for the super rich…. reality is quite different.
IHT405 is the form you use to tell HMRC about all of your properties upon death. Have a look at the form, the valuation of a property (or plural) can and will make a considerable difference to the value of an estate. If you have a second (or further) property, then please keep really good records about it. This includes dates and purchase prices, valuations, work done, insurance costs and so on. You need to be fastidious in your record keeping… not least because these records may also be pretty vital whilst you are alive.