No Increase in Tax Free Nil Rate Band

11 December 2009

In his pre-budget announcement the Chancellor of the Exchequer stated that the tax-free ‘Nil Rate Band’ (NRB) for inheritance tax purposes will not be increased from the existing 2009/2010 level of £325,000.

Whilst this reflects the fact that the most valuable asset of many tax-payers, the family home, has not significantly increased over the past year as a result of the down-turn in the housing market, this is disappointing. Since 1997 the NRB has increased by only 51% as compared with the 130% increase in UK house prices over the same period, and will leave many more home-owners who would not regard themselves as being wealthy with an estate that is liable to IHT.

Tax-payers may have to turn their attention to other means of keeping their estate within the NRB.  If you wish to discuss your options in this regard please contact Chris Wallace.