Changes to in­her­i­tance tax rules are good news for home­own­ers

Buckinghamshire Advertiser - - BUCKS PROPERTY - Si­mon Roberts

THERE has al­ways been one tax that I feel has caused much up­set with many of our clients and that is in­her­i­tance tax. It was there­fore great news to see that Mr Os­borne has changed the un­pop­u­lar in­her­i­tance tax thresh­old in re­sponse to pres­sure from home­own­ers who felt that pay­ing two hefty sums of tax on their prop­erty (stamp duty on pur­chase and in­her­i­tance tax on death) was ex­ces­sive.

A sur­vey in March by YouGov, found that 59% of vot­ers thought the tax was un­fair.

Now the Chan­cel­lor has an­nounced that as of April 2017, the in­her­i­tance tax thresh­old will be phased up to in­crease to £1m by 2020-21.This grad­ual rais­ing of the thresh­old over four years will al­low a cou­ple to pass a house worth up to £1m to their chil­dren or grand­chil­dren upon death with­out in­cur­ring a tax charge.

The change is not as in­stant as some home­own­ers might have hoped for, but it will still ben­e­fit the vast ma­jor­ity of home­own­ers.

This could mean that older peo­ple with larger homes may not feel the need to down­size to a con­sid­er­ably smaller home or in­deed at all and may like to make full use of the thresh­olds by still main­tain­ing a larger prop­erty.

Mr Os­borne has as­sisted this by mak­ing sure that if some­one down­sizes be­fore they die, their tax-free ex­emp­tion will stay at the value of the house that they sold. I be­lieve this is good news, par­tic­u­larly for those who are con­sid­er­ing down­siz­ing, yet still want to re­tain sub­stan­tial value in their homes.

This could prompt some to look at the higher end of their bud­get, ex­pect­ing the value of their home to in­crease, and wish­ing to pass as much wealth as pos­si­ble onto their fam­i­lies.

WELCOMETAX CHANGES: Si­mon Roberts, man­ag­ing di­rec­tor of Roberts Newby which is now part of Strutt & Parker, says rais­ing the in­her­i­tance tax thesh­old will ben­e­fit the ma­jor­ity of home­own­ers.

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