Inheritance Tax is considered by many, to be the most unfair tax of England & Wales.
It’s not going anywhere, but the new proposals, due to come into effect in 2017, are ridiculously complex and in my opinion, unfair.
Like our Prime Minister, I am merely an Aunty, you see. The government wanted the big headline of getting one million pounds of estate free of tax (actually, it’s charged at nil percent, rather than being free of tax, but that’s the lawyer in me). However, it doesn’t apply to me, because I have no children to pass my estate down to.
Penalising people who either cannot or choose not to have children, is in my opinion unfair, but having attended two seminars in recent weeks, dedicated to what’s called the Residential Nil Rate Band (RNRB for short), I continue to feel that the proposals, due to take effect in April 2017, are unfairly complex.
Yes, there are some professionals rubbing their hands together in glee, sure that the general public will be as bamboozled as many lawyers were, when the idea was first considered. Most lay people will just about be able to get their heads around the basics, with appropriate visuals and a couple of long meetings, but when you consider how life pans out in reality, with people moving into care in old age, downsizing, or choosing to live with family members and holding their assets in more liquid assets than the traditional family home, or the fact that house prices outside of the South East of England can be considerably less, and this extra allowance only applies to your residence, the proposals are keeping lawyers happily attending course after course to understand the specifics.
How can it be right in this era of Plain English, fairness and transparency, to introduce such a complicated set of rules? In the specialist area of Will drafting, one of our gurus is Professor Lesley King, who spoke at the Law Society just last week. Professor King’s description of the proposals was “needlessly complicated.”
The solution? At the end of every seminar dealing with the RNRB now, it’s becoming clear what the fair and simple solution would be. Increase the existing Nil Rate Band. Not just for property owners. Not just for Southerners. Not just for parents. For everybody.
One of the fairest changes to the law in the area of Inheritance Tax, took effect in 2007, when married couples were allowed to transfer a Nil Rate Band (NRB) so that they benefit from two NRBs, without investing in posh, expensive Wills (around £1,000 back in the day). That was a good, fair, moral development in our law, which I still congratulate our government on introducing. People are now able to put their affairs in order in a way that they understand, and is reasonably simple to take action on.
Please Mrs May, if you’re listening, just take a step back, and consider increasing the Nil Rate Band for all. You know it makes sense.
If you want to chat to me about this, my office line is 01727 840 240.