Couples were today warned they could face missing out on a £175,000 inheritance tax exemption by failing to register their home jointly.
Redditch lawyer Sara Simson says couples whose deeds to their home are registered in only one partner’s name are cutting their tax-free inheritance allowance and slashing the amount they will leave to their children.
Sara, an associate in the Wills, Probate and Lifetime Planning team at FBC Manby Bowdler’s Redditch office, said it was vital couples registered their homes in both names to make the most of their entitlement under the Residence Nil Rate Band (RNRB) allowance.
“The allowance was introduced in 2017 as an addition to the Inheritance Tax threshold, to allow more families to leave their main home to a direct descendant without paying tax,” she said.
“It means that from April, as long as a home is jointly registered to both partners and upon the first death they leave their estates to each other, they can leave an estate of up to £1million without falling victim to Inheritance Tax.
“But if the property is registered only in one name – as a good many are – then the family will lose out.
“The RNRB currently stands at £150,000 for individuals and £300,000 for couples, but will increase to £175,000 and £350,000 respectively in April. That is a huge amount of money to risk not being able to pass on for something as simple as registering your home jointly.
“We know from our own experience just how upsetting it can be to families when they find out too late how this allowance works, so would urge anyone in this situation to seek expert advice.”
To qualify for the RNRB, the homeowners must be leaving the property to a direct descendent — children, stepchildren and grandchildren.