An Inheritance Tax (IHT) avoidance technique widely thought to be limited to married couples is actually available to everyone.
Avoiding IHT is becoming increasingly important to UK homeowners as 1.4 million people fall within the remit of IHT. This figure is likely to grow further as house prices have, on average, risen by 60% over the past five years, while the IHT threshold has only risen 16%.
Specialist IHT planning firm, Chancery Law Group, has been told by the Capital Taxes Office the Nil Rate Band Discretionary Will Trusts can apply to everyone.
Tony Gimple, managing director of the Lewes-based Chancery Law Group, said: ‘The Exchequer collects £1bn a year in IHT, but by using a Nil Rate Band Discretionary Will Trust, married couples have always been able to escape the tax. Now unmarried couples and singles can do the same.’
Trusts like this are the accepted way in which assets can be transferred, tax-free, between individuals, irrespective of value.