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Nil rate band of up to £1million now available upon the death of married couples

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The residence nil rate band (“RNRB”) was introduced in April 2017.

It provided an additional nil rate band claimable upon a person’s death, on top of the general nil rate band (a maximum of £325,000 per person) already available. The RNRB started at £100,000 per person for deaths on or after 6th April 2017 provided certain conditions were met.

The RNRB has increased by £25,000 per person each tax year since then. From 6th April 2020, the available RNRB is £175,000. This is set to increase each year going forward in line with the Consumer Prices Index.

It means that married couples have not only their general nil rate band available (currently a maximum of £325,000 each) but also potentially the RNRB at £175,000 each. Any of the general nil rate band or RNRB which is unused on the death of the first spouse is able to be transferred to the surviving spouse’s estate on their subsequent death. This means that upon that spouse’s subsequent death there could potentially be a total nil rate band available of £1million provided the various conditions of the RNRB are met. Namely this means that an[JR1]  estate should include a property or proceeds of sale of a property which is passing to children (including stepchildren, adopted children and foster children) or their lineal descendants, as well as other conditions.

If you would like any further information on how to qualify for RNRB please contact a member of our Private Client team.

 

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