Over 55s could miss out on the family home allowance for inheritance tax (IHT) by passing on their family home to siblings rather than a direct descendant.
10% of people surveyed by LV=Legal Services said they plan to leave their home to siblings rather than their children or grandchildren.
The family home allowance will be introduced from 6 April 2017, potentially providing an additional band of £100,000 per person if they pass a family home to a direct descendant.
The band will increase by £25,000 each tax year until it reaches £175,000 in 2020/21.
Martin Milliner, director at LV=Legal Services, said:
“This increased IHT allowance is a boost to those who’ve seen their homes rise in value and want to be able to pass on this wealth without sharp tax charges, but it’s crucial that they don’t fall prey to the sibling trap.”
Contact us today to discuss inheritance tax planning.