The Nil Rate Band allowance is £325,000. This is the amount each person can give away free of tax on death.
Lifetime gifts are:
- £3,000 per annum
- £5,000 to children on their marriage
- £2,500 to grandchildren on their marriage
- Regular gifts out of income
- Lump sum gifts subject to the seven year survival rule
The Nil Rate Band allowance can be transferred between spouses or civil partners, so that on the death of the second spouse or civil partner, the sum of £650,000 can be left tax free to their children or other beneficiaries. This benefit applies to existing widows and widowers.
Nil Rate Band Discretionary Trusts
If you’ve already made Wills to include a Nil Rate Band Discretionary Trust, these don’t need to be altered. The Wills still give you the same tax advantages as originally intended.
If you’re still considering Nil Rate Band Discretionary Trust Wills, please remember that even if you no longer need protection against Inheritance Tax, these Wills can also give protection against the effects of long-term care home fees, and can provide you with extra flexibility in the distribution of your estate to your children and other beneficiaries.
The most important thing is to ensure that you have a Will which does what you want it to do.