The Residential Nil Rate Band – RNRB – can be quite complicated. However, if you can get a good understanding of it, you’ll be saving yourself a whole lot in inheritance tax. Since when it came into effect in April 6th2017, any deaths after this date can claim the £325,000 rate band. Currently the RNRB is set at £125,000 per person with an expected annual increase of £25,000 every April until when it reaches £175,000. After this figure, it will increase annually in line with inflation.
To benefit from RNRB, you have to possess a Qualifying Residential Interest. A QRI means ownership of a property of a deceased. The residence must have been lived in by the deceased at a point. A Buy to let property does not qualify for the RNRB, only a place the deceased must have lived in. In the event of multiple properties, the executors will settle for which will be the QRI. However, the prevailing value of a house will determine the QRI entitled to.
Another important condition to benefit from QRI is to be ‘related’. The direct descendants, who can either be the deceased’s adopted, biological, fostered or even stepchildren – this may include the grandchildren also. Other descendants include spouses of those children and grandchildren; the widows, widowers or other civil partners of the deceased who are unmarried at the time of death.
RNRB is intended to help the middle class in England and those who are not wealthy. There will also be traps that will surface now or later due to the objectives of RNRB.
For more information or to discuss your needs, please call John Ireland now
on 0208 547 2583 or email, firstname.lastname@example.org
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