Changes to UK inheritance tax and the Residence Nil Rate Band headache
The rules governing UK inheritance taxes (IHT) are known to be complex with recent changes including the Residence Nil Rate Band (RNRB) being introduced which has been described as a trap for the unwary.
The history of the RNRB dates back to the Conservative Party’s 2007 statement. At the time, George Osborne (later becoming finance minister) promised to increase the nil rate band (NRB) from £325,000 ($416,022) to £1 million, however eventually in reality, a set of complex rules (the RNRB) was later introduced. The scope of the RNRB is limited, however it is important for clients to review their wills in light of the new rules as it can result in a valuable tax saving if the conditions are satisfied.
Danjuma Mshelia, associate in our private wealth team, discusses these conditions and examines the recent IHT changes in an article published by Wealth Briefing (please note that the article is behind a paywall).