No surprises here as the new exemption for the family home had been widely trailed before the budget.
The new allowance to exempt the main residence will apply for deaths after 6 April 2017 and only where the residence is left to lineal descendants including step-children adopted children and foster children. It can be passed to the spouse where it is unused on the first death. It will be phased in as follows
- 2017/18 £100,000
- 2018/19 £125,000
- 2019/20 £150,000
- 2020/21 £175,000
Where the deceased’s estate is worth more than £2m it will tapered away by £1 for every £2 so once the estate is worth more than £2.35m the allowance will not be available. There is also protection for those wishing to downsize.
Now is a good time for revisit your will.
UK Non Domiciled Individuals
Changes to the current rules have been on the radar for some time now and the Chancellor has chosen to take a direct method of tacking the issue.
With effect from April 2017 anybody who has been UK resident for more than 15 out of the last 20 years will be deemed to be domiciled in the UK thereby losing the benefit of the remittance basis and the measure will also apply to inheritance tax.