People executing wills online without seeking professional advice could be losing out on changes to the residence nil-rate band, an investigation by the Times has found. This is because the concession is not given automatically, but must be applied for.
Inheritance tax (IHT) changes in the 2015 Budget allow a £1 million property to be bequeathed to children or grandchildren tax-free by 2020. This is available even on the estates of those who have downsized.
However, business experts are warning that the paperwork likely to be required in such cases could cause problems even for those who are well versed in conducting negotiations with HM Revenue & Customs.
Hundreds of thousands of people could miss out on this valuable tax perk unless they urgently review their wills.
By not understanding the rules relating to IHT, families could unnecessarily end up paying tens or even hundreds of thousands of pounds in tax. What’s more if the benefactors find out that relief could have been claimed and wasn’t, the executor is liable and could be sued.
Through careful planning, IHT can be mitigated. We do however recommend that planning starts as early as possible.
Our Beavis Morgan tax experts are available to guide you and advise on the available strategies. If you would like to know more, please contact Barrie Dunning or your usual Beavis Morgan Partner.