Andrew Troughton, Director of Carver Knowles considers how the Budget announced by the Chancellor of the Exchequer on 8th July, may affect farmers and landowners.
One of the main points revealed in the budget were the changes to Inheritance Tax. The measures announced will introduce an additional nil-rate band when a residence is passed on death to a direct descendant. For landowners with property this would mean that anyone with children or grandchildren will benefit from an additional non-rate band, meaning that the amount of assets able to be passed on free of inheritance tax will increase to £500,000 in April 2020.
In the case of a married couple, and as with the current nil-rate band, any unused amount will be passed onto a spouse. The combining of all the exemptions will mean that by 2020 a married couple will not pay any inheritance tax on properties with a value of £1 million or below. However, where the net value is more than £2 million, the main residence nil-rate band would be withdrawn at a rate of £1 for every £2 over the threshold.
Commenting Andrew Troughton said: “It will be interesting to see how the rules will affect Inheritance Tax and in particular farmhouses. As with all measures introduced under the budget, it will take time to see the full implications of the changes, but we would always advise farmers and landowners to discuss their Tax position with their advisors and take steps to minimise potential tax bills both now and in the future.”
For further information please contact andrewtroughton@fts.carverknowles.co.uk