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The Budget - and Wills
March 2010
The Chancellor, Alistair Darling, gave his budget report to the House of Commons today. Significant points (in respect of wills and estate planning) included:
- The IHT (inheritance tax) NRB (Nil Rate band) allowance will not increase in 2010-
2011 to the proposed limit of £350,000, but remain at £325,000 per person. Further, this limit will be retained for the next 4 years. - More IHT loopholes are to be closed -
including buying property from a trust.
Observations:
No doubt, as the fine print is read in detail, more aspects will come to light.
Comment:
This ‘freezing’ of the IHT NRB threshold does have tax implications. If you are a surviving spouse who is looking to use your former spouses transferable NRB allowance the tax implications for you if your estate is greater than £700,000 is that you will now be faced with an increased tax charge of £20,000. Year on year this ‘freezing’ of the limit will have a growing impact.
The IHT NRB Discretionary trust now has some benefits over relying upon the Transferable NIL Rate Band.
- Pre budget report
- IHT NRB frozen
- Additional tax for the ‘wealthy’ of £20,000