16 October 2007
Pre Budget Speech - Changes to Inheritance Tax
“The changes to IHT announced on 9 October 2007 will be a boon to married couples and civil partners,” said Paul Tobias, Head of our Trust & Investment Department, when commenting on Alistair Darling’s Pre-Budget Speech.
Paul added, “The new “transferable nil rate band” for spouses and civil partners will enable the personal representatives of a surviving spouse or civil partner to claim not only that person’s IHT nil rate band exemption but also a proportion of a second exemption, equivalent to the proportion of the exemption that was not used by the first spouse or civil partner to die.”
“Potentially, therefore, an IHT exemption of £600,000 could be claimed by the personal representatives of a surviving spouse this tax year and this maximum will increase to £700,000 by 2010.
This will greatly simplify IHT planning for many couples, who will no longer need to make complex and costly trust arrangements simply to ensure best use of their IHT allowances.”
Paul also commented “The announcement that existing widows/widowers and surviving civil partners may also benefit from the transferable nil rate band whenever their partner died is an unexpected bonus and is a rare example of a change of tax rules which has a retrospective effect which actually benefits the taxpayer!”
Hart Brown have produced a factsheet on the IHT changes announced in Alistair Darling’s Pre Budget Speech of 9 October. For a copy, please contact Shaun Parry-Jones on 01483 887733.