Reduce Your Inheritance Tax Bill Whilst Living in Spain – a Guide to the Residence Nil Rate Band
Good news! From 6th April 2017 there is a new, bigger Nil rate band of inheritance tax. This new band was called the Residence Nil Rate Band (RNRB) but now is also known at the HMRC as the “Additional Threshold” (AT). If the change of name isn’t enough to cause confusion, how it actually works is not as straightforward as one might expect.
A recent survey by Old Mutual showed that 70% of people did not know about the new RNRB. Of those that did know;
- 45% of people did not know that you can nominate which property you can nominate for the AT.
- 45% of people did not know that you can still claim the AT even if the property has been sold.
- 40% did not realise that the mortgage can be deducted before applying the AT.
- 36% did not realise that the property has to be left to a direct descendant to be eligible for the AT.
- 29% did not realise that the AT will increase up to the UK tax year 2020 – 20021
Living in Spain
For those of us from the UK, and for those people you know who are from the UK, it is possible to claim this Additional Threshold even though we are living in Spain. This is important as we will still most likely to be assessed for UK Inheritance Tax even if we have lived here for 50 + years.
Download the full guide below!
For further information on financial issues that might effect you as an expat living in Spain, you can contact the author of this article Barry Davys