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Warning: These articles were originally published as brief newspaper articles. The articles are not intended to be definitive advice on any particular set of circumstances. The authors and the firm of Nicholson Portnell accept no liability for any use of these articles. Specific legal advice should always be sought in all cases for any actual transactions or matters.
The October Inheritance Tax Changes - Do they affect me? February 2008
Alison Bragg
As from 9th October 2007, where married couples are concerned, the nil rate band for inheritance tax purposes (currently £300,000) of the first spouse to die can effectively be transferred to the surviving spouse, to the extent that it remains unused.
At current rates this means that spouses with simple Wills leaving everything to each other, who have not made any significant lifetime gifts, can potentially leave assets to the value of £600,000 free of inheritance tax on the death of the surviving spouse.
The new rules apply if the surviving spouse was living on 9th October 2007, no matter how long ago the first spouse died.
The above changes are now effective, but not yet on the statute book, so that the rules could still change before they become law (probably in July).
If you are a widow(er) whose spouse has died, you need to ensure that copies of the relevant
documents containing details of your spouse’s estate are retained with your Will.
If you have made nil rate band discretionary trust Wills you might wish to take advice as to whether to retain these or revert to more simple Wills. If you made your Wills prior to July 2006 you may wish to take advice concerning the Inheritance Tax changes made by the Finance Act 2006.
Please note that all references above to married couples/spouses/widow(er)s should be read as including civil partners/bereaved civil partners.
Should you wish to discuss any of the issues raised above please do not hesitate to contact Alison Bragg, Pamela Air, Sara Frost, John Robinson or John Humble at Nicholson Portnell.
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