What is NRB?
£325,000 – the tax free allowance, or Nil Rate Band, you can leave to your beneficiaries before your estate pays Inheritance Tax.
How will Inheritance Tax affect my family?
Now that the average family home is worth more than £250,000, more and more families are aware that they may be liable to pay Inheritance Tax.
Here’s an example that explains how your family might be affected…
Take a married couple – together they have an IHT threshold of £650k. Their family home is worth £350k leaving £300k between them for their remaining assets before their estate is liable to pay IHT.
This sounds a lot, but this sum can quickly be reached when your assets may include:
- Your pensions and Death in Service benefits
- Your life cover proceeds
- Your savings
- Your investments
- The money in your bank account
- Your vehicles
- Your other possessions
If you are single, it’s even more concerning… if you own a property worth £250k you only have £75k for all your remaining assets before you are over the NRB threshold.