New Family Home Allowance (ANRB) Introduced
In this years summer budget Chancellor George Osborne announced that in addition to the current inheritance tax (IHT) nil rate band threshold (NRB) of £325,000 per person.
A new “family home allowance” known as an additional Nil Rate Band (ANRB) is set to be introduced from April 6, 2017.
Currently, the inheritance tax (IHT) nil rate band is £325,00 this amount will be frozen until April 2021.
Once in force, the new (ANRB) allowance will mean that a married couple would be able to pass up to a £1m estate on to their children without being taxed for the privilege.
The new family home allowance will only apply to properties valued at less than £2 million, and where the property passes to specific people.
The latest Finance Bill published on 15th July 2015 confirmed that for deaths after 6th April 2017, an additional Nil Rate Band (ANRB) will be introduced applicable when a ‘residence’ is passed on death to either children or grandchildren.
The new ANRB annual threshold will be gradually introduced and increased as follows:
- £100,000 for 2017/2018
- £125,000 for 2018/2019
- £150,000 for 2019/2020
- £175,000 for 2020/2021
For future years the ANRB will increase in line with the Consumers Price Index. The ANRB will be able to be transferred between Spouses or Civil Partners as long as one of the deaths has occurred after 6th April 2017.
However if the deceased had more than one main residence, it will be the responsibility of the executors to nominate which residence will receive the benefit of the ANRB, this does not include buy to let properties.