The Residential Nil Rate Band
The legislation comes into effect in April 2017. It starts at £100,000 and will increase each year until 2020 when it will reach £175,000. But the new RNRB only applies if assets are left to your direct descendants. This is your children (including step-children, adopted children or foster children) or grandchildren. The new RNRB applies to any residential property you have ever lived in although your executors cannot use the allowance against a buy-to-let property. However, there is no minimum residency period. Your executors can only use the allowance against one property though – if you have more than one property at the date of your death, your executors would need to nominate which should be used. A foreign property could possibly be used to fund the RNRB tax allowance.
The home doesn’t need to be owned at death to qualify. If you have downsized or sold your property after 8 July 2015 the proceeds will still qualify, provided the assets still pass to direct descendants and the property would have qualified, had you not sold it. The important point here is to ensure you keep records (and you let your executors know where the records are kept).
If the value of your state is over £2 million (after deducting liabilities but before reliefs and exemptions) the RNRB is reduced by £1 for every £2 over £2 million.
The legislation is complex and the planning is of a high level , at Tutis we provide a full review service carried out by our lawyer partners to make sure every effort is made to protect this valuable addition allowance , we charge £200.00 including VAT for this in-depth report , but feel this is essential to make sure the advice is tailored to your individual circumstances