Good news on the inheritance tax front

If you're worried that rising house prices over the years might have pushed the value of your estate into the realms of paying inheritance tax, you might be able to take some comfort from the introduction of the 'residence nil rate band' from 6 April Much hailed as a £1 million threshold for inheritance tax, it's not as simple as it sounds and not everyone will be able to take advantage of this or be eligible for the maximum allowance.

The attached photographs show shortlisted projects in Edinburgh; East Claremont Street, Solen Vinklar, Sunken Extension, and Tudsberry Court.
 
A total of four Edinburgh housing projects have been shortlisted as part of the 2016 Saltire Society Housing Design Awards, due to be announced later this month.
 
Now in their 79th year, the prestigious awards celebrate excellence and achievement in Scottish house building and place-making and are part of a busy programme of special events and awards planned to celebrate the Saltire Societys 80th anniversary year.
 
Scotlands capital is particularly strongly represented in the Alterations, Renovation and Extensions category of the awards, with three Edinburgh projects featured on the shortlist:
 
·         Sunken Extension, a complex extension to a Grade B listed Georgian house.

·         Solen Vinklar, a unique project to create a new cooking: eating: living space and first floor bedroom suite.

·         East Claremont Street, an innovative glass box extension
The attached photographs show shortlisted projects in Edinburgh; East Claremont Street, Solen Vinklar, Sunken Extension, and Tudsberry Court. A total of four Edinburgh housing projects have been shortlisted as part of the 2016 Saltire Society Housing Design Awards, due to be announced later this month. Now in their 79th year, the prestigious awards celebrate excellence and achievement in Scottish house building and place-making and are part of a busy programme of special events and awards planned to celebrate the Saltire Societys 80th anniversary year. Scotlands capital is particularly strongly represented in the Alterations, Renovation and Extensions category of the awards, with three Edinburgh projects featured on the shortlist: · Sunken Extension, a complex extension to a Grade B listed Georgian house. · Solen Vinklar, a unique project to create a new cooking: eating: living space and first floor bedroom suite. · East Claremont Street, an innovative glass box extension

So, how will it work and who will benefit? For starters, every individual, regardless of marital status, the type of assets in your estate, or who is inheriting from you, has a nil rate band of £325,000 above which your estate would be taxed at 40 per cent. If you are married or in a civil partnership at the time of your death and leave your estate to your spouse/ civil partner, your estate will be exempt and you will not use up the nil rate band. The unused nil rate band can then be transferred to your spouse/ civil partner’s estate on their death (or it can be transferred to your estate if you have been widowed), giving an additional £325,000 on top of their own allowance of £325,000. The value of the estate would need to be more than £650,000 before inheritance tax is charged.

The residence nil rate band kicks in if, for deaths after 6th April 2017, your estate includes a home and you are passing it on to direct descendants, and the value of your estate is not more than £2 million. For the tax year 2017-18 the residence nil rate band is £100,000 and this will increase by £25,000 each year until 2020-21 when it will be £175,000 (after which it will increase in line with inflation). Again, this can be transferred to a surviving spouse/ civil partner’s estate, potentially adding an extra allowance of £350,000. If you have been widowed, regardless of how long ago, this can be transferred to your estate. Add this to the £650,000 and you have the magic £1 million. But not until 2020, for 2017-18 the maximum combined allowances will total £850,000.