The recent changes to inheritance tax laid out in the summer budget have caused some confusion about how much can be passed on tax-free in a will. Telegraph Money have put together a comprehensive guide on the changes to inheritance tax alterations, which you can see here.
Family Home Allowance
At present, everyone can pass on up to £325,000 free of tax, which is doubled if you are a married couple or civil partnership. Anything above this amount is taxed at 40%. From April 2017, home owners will be allowed an extra £175,000 to pass on tax free, taking the total to £500,000. Again this is doubled for couples, meaning that an estate worth £1 million can be inherited without incurring any taxation. The £175,000 increase will be introduced gradually from 2017.
This new allowance will be tied directly to the value of a property and will be known as the family home allowance. To qualify, the property in question must have been the main home at one point in time and must only be passed on to a direct descendant for it to be un-taxed.
Full information can be found on the Telegraph website, where specifics about the changes to inheritance tax are explored in detail.
