Under current IHT laws, most (not all!) married couples and civil partners can pass their entire estate to each other when they die without having to pay any IHT. This prevents what would otherwise be a hefty tax bill being paid to HMRC and depleting the resources available for the survivor
However, there are no similar IHT exemptions for people who have not married/entered into a CP and instead are sharing a home with their siblings. This can mean that on the death of one sibling, their elderly sibling may be forced to sell the home they once shared to pay IHT, because most of their estate is tied up in the property. This has resulted in a Private Bill being introduced to the House of Lords, which suggests extending the IHT marriage exemption to adult siblings – provided they have lived together for seven years and the survivor is at least thirty years old (to reduce house sharing being used solely to avoid IHT). This would have significant benefits for the surviving siblings.
The first reading took place on 14 January 2020 and the date of the second reading is yet to be announced. Keep checking our website and subscribing to our HTML to keep up to date with the progression of this Bill.
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