The government's flagship inheritance tax policy is not quite what it seems, and care is going to be needed to ensure that advantage can be taken on a case by case basis.
Already I have come across a client who on the one hand may lose some of the benefit owing to his estate being in excess of £2 million, but won't get the full benefit at the other end as his largest property is relatively small.
Isn't this the epitome of old-Tory policies? You can have an extra inheritance tax allowance if you are wealthy, but only if your house is big enough!
More than two months after it was announced in the summer Budget, HM Revenue and Customs has finally clarified how the new residence nil-rate band will work in practice. In the summer Budget it was announced an extra residence nil-rate amount will be introduced for deaths on or after 6 April 2017. This will be phased in over a period of four years so that for deaths in 2017 to 2018 the maximum additional amount will be set at £100,000, increasing to £125,000 for 2018 to 2019, £150,000 for 2019 to 2020 and to £175,000 for 2020 to 2021. The residence nil-rate band will be indexed in line with the consumer price index from 2021 to 2022 onwards.