The Chancellor announced yesterday that it was all change in the world of Inheritance Tax.
This was particularly good news for the people of Cornwall where house price rises have dragged many people in to an unexpected Inheritance Tax trap resulting in anguish and the expense of devising legitimate and sometimes unwieldy methods of limiting their exposure.
“Transfers between spouses and civil partners have always been exempt from a charge to Inheritance Tax. However without a saving device, Inheritance Tax could bite deeply on the death of the survivor given that the Inheritance Tax allowance was what many people regard as a miserly £300,000. Whilst this will remain in force for individuals the changes, which are now stated to be in force, mean that spouses and civil partners will have the benefit of a joint transferable allowance of £600,000 until April 2010 when the allowance will rise to £700,000.”
A welcome feature of the new proposals is that widows/widowers and surviving civil partners will particularly benefit in retrospect as those who have already lost their partner will now be able to make use of their deceased partner's potentially otherwise wasted allowance.
Ann-Marie further comments:-
“This is undoubtedly good news and to be applauded. What it will mean in practice is that spouses can leave their assets to each other with IHT impunity but on the death of the survivor a full £600,000 allowance will be available, taking, it is to be hoped, a large proportion of the population out of the IHT nightmare.”
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