It has been proposed that a new ‘family home allowance’ should be provided at a rate of £175,000 per parent to be added to the individual inheritance tax allowance permitted for those bequests that are made to children or grandchildren that are also inclusive of a main home under wills in Coggeshall and areas throughout the UK.
In view of the fact that it is possible for a married spouse or civil partner to pass on their inheritance tax tax-free allowance to either their spouse or civil partner then this could serve to means the threshold for inheritance tax could increase up to £1 million for those estates that include a main home that either a married couple or civil partners leave to their children or grandchildren.
However, some commentators working in this area have argued such proposals would unnecessarily complicate the current system of inheritance tax whilst benefiting only those that have their wealth largely linked to the family home under wills in Coggeshall and other areas in Essex. In addition, since the proposals do not seem to be linked to lifetime gifts, the elderly could be deterred from downsizing their main residence. This is because they are afraid the inheritance tax they have to pay on their estates in areas under wills in Coggeshall will be too high so they end up being effectively trapped in houses too big for what they actually require and this could also place additional pressure on the limited supply of family homes in the UK. Furthermore, some restrictions could also be placed upon the proposed ‘family home allowance’ since those estates that are worth £2.35 million and over would not be able to benefit from it whilst pressure could also be placed upon other important inheritance tax reliefs including agricultural property relief and business property relief for those writing their wills in Coggeshall.
It is arguable that a more effective and fairer means to bring about a reduction in the burden of inheritance tax would arguably have been to provide for an increase in the inheritance tax tax-free threshold for all of the estates that people hold under wills in Coggeshall and other areas throughout the UK.
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