No children? No new inheritance tax break as confirmed by the Government
Conservative party politician David Gauke emphasized the extra ?350,000 ‘family home’ inheritance tax allowance per couple shall not be granted?to those without children.
This tax concession, known as the ‘family home allowance’ means a married couple?s joint ?650,000 inheritance tax exemption is increased to ?1m with an extra allowance exclusively applicable to the family home.
A singular allowance of ?175,000 will also be granted to each spouse in addition to their individual ?325,000 allowance, this will be phased in.
A key factor to be mindful of is that it only applies where the family home is left to children, grandchildren, stepchildren or adopted children. This means that if you apply 40% death tax to ?350,000, a childless couple can expect a ?140,000 bill that they wouldn?t have to pay if they had children.
So why should childless couples pay more inheritance tax? David Gauke?s answer to this pressing questions was “The Prime Minister and Chancellor of the Exchequer have both highlighted that when you become a parent, the wish to pass something on is the most basic, human and natural instinct there is.
“Focusing the policy on children and grandchildren ensures parents know that they will be able to pass on the family home that they have worked hard for to the next generation without the worry of inheritance tax.”
That is all good and well, if you have children that is. So what are those who don?t to do about the issue? Well, for now it?s still a pressing question which remains unanswered.