When a spouse or civil partner passes away, the nil rate band (NRB) and the residence nil rate band (RNRB) can be transferred between them, providing valuable inheritance tax relief.
Are you considering setting up a Discretionary Nil Rate Band Trust Kent? This type of trust can help preserve unused nil rate bands from the first death, allowing the surviving partner to potentially benefit from two full nil rate bands, regardless of changes in their income or assets since their last marriage.
There is a limit of two discretionary nil rate trusts per individual meaning one can only benefit from a maximum of two NRBs and two RNRBs. For those with multiple marriages or civil partnerships, these allowances can be transferred from different deceased spouses, potentially enabling you to pass up to £1 million to the next generation free from inheritance tax.
If you want to include multiple family members in your will or estate plan, we offer expert legal advice across the UK to guide you through this complex process.
Inheritance tax planning is a common concern for our clients. Many seek guidance on maximising their NRB and planning to cover any potential tax liabilities. We provide complimentary consultations to help you understand your options and develop a robust estate plan that protects your family’s future.
Did you know that with proper planning, you could leave up to £1 million to your children without paying inheritance tax? The family home no longer automatically attracts inheritance tax thanks to the residence nil rate band.
Our knowledgeable team can help you navigate tax planning strategies, including trusts, to avoid capital gains tax and secure your assets effectively.
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Since April 6, 2020, the combined inheritance tax allowance including the residence nil rate band can effectively allow a couple to pass on up to £1 million free of inheritance tax. This threshold is guaranteed until at least April 5, 2026.
Careful planning with your solicitor is essential to avoid unexpected tax bills, especially if you intend to use lifetime gifts or involve third parties to minimise tax liabilities.
The RNRB acts alongside the standard nil rate band, reducing the value of your estate subject to the 40% inheritance tax. It applies specifically to a property that you have occupied as your main home, and the benefit can transfer to your spouse or civil partner if unused.
The property must pass to your direct descendants (children, grandchildren, or other lineal descendants) to qualify.
The allowance is reduced if your estate is worth more than £2 million.
Interests in buy-to-let or investment properties do not qualify.
If you downsize or sell your home after July 8, 2015, special rules may allow you to retain the RNRB if the proceeds are passed on to your descendants.
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A discretionary nil rate trust is a powerful tool for inheritance tax planning. It helps protect assets and ensures your wishes are respected for generations to come. Our experts can help you maximise your allowances and navigate the complex rules surrounding inheritance tax in Kent.
Contact Wills 4 Less Kent today for expert advice on setting up a discretionary nil rate trust. Secure your family’s future with tailored estate planning solutions that safeguard your wealth and provide peace of mind.