Updated: New hyperlink to ‘Residence nil-rate band Guide’ added to the more information section.
The draft Finance Bill 2016 clause and Explanatory notes were published on 9 December 2015.
This measure introduces an additional nil-rate band when a residence is passed on death to a direct descendant. This will be:
- £100,000 in 2017 to 2018
- £125,000 in 2018 to 2019
- £150,000 in 2019 to 2020
- £175,000 in 2020 to 2021
It will then increase in line with Consumer Price Index from 2021 to 2022 onwards. Any unused nil-rate band will be transferred to a surviving spouse or civil partner. It will also be available when a person downsizes or ceases to own a home on or after 8 July 2015 and assets of an equivalent value, up to the value of the additional nil-rate band, are passed on death to direct descendants.
Further details of these proposals are in a technical note on the Inheritance Tax main residence nil-rate band and downsizing proposals.
Source: HMRC