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Non-Married Couple IHT Saving Will

For non-married couples, who want to pass their property and any assets they have to their surviving partner when they die, it is vital that the benefit of the available Inheritance Tax allowance on the death of the first person is not ‘lost’.

When one partner dies their estate is valued for Inheritance Tax purposes and their available Inheritance Tax allowance (known as the Nil Rate Band or NRB) is calculated. The value of property and assets falling in the deceased’s NRB are not taxed, whilst the remaining value is taxed at rates applicable on death (up to 40%). The current NRB is £325,000 but this can be reduced by a number of things such as significant lifetime gifts.

If the deceased partner’s assets are simply passed to the surviving partner they will increase the value
of the surviving partner’s estate to be taxed on second death. There is, however, a way to stop this happening through taking out a Non-Married Couple IHT Saving Will. This Will creates a protective shelter on the death of the first partner, which ‘soaks up’ property and assets to the value of the deceased’s available NRB. This protective shelter takes the form of a discretionary trust.

The Benefits of  a Non-Married Couple IHT Saving Will

This type of Will allows unmarried couples to ring-fence the available NRB on the death of the first partner.

  • This means assets can be preserved and protected for the next generation.
  • Assets can be prevented from being used to pay for the care fees of the surviving partner.
  • It can protect against any changes the surviving partner subsequently makes to their Will.
  • It can avoid a second Inheritance Tax charge on assets added to the surviving partner’s estate.
  • It can ring fence the available NRB on the estate of the surviving partner

For general informational purposes only, not intended or to be taken as legal advice. To make sure this is appropriate for you please seek advice and contact us.

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BPA Associates Limited
The Old Schoolhouse,
75a Jacobs Wells Road,
Clifton, Bristol
BS8 1DJ

Company number: 10721731

 

BPA Associates ltd
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