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Residence Nil Rate Band (RNRB).

A new tax-free allowance was announced in the Summer Budget 2015 (the Residence Nil Rate Band) that will take effect on or after 6th April 2017.  Downsizing provisions have yet to be finalised.

There are a lot of myths and misconceptions surrounding this new allowance - please call or view our website pages (not yet updated) for further information - including:

  • everyone has a new allowance of £1M;
  • everyone can pass their home free of tax to their children

You may not get the full allowance (or double the allowance) if:

  1. your estate exceeds £2M
  2. you rent property
  3. you don't leave your property (or proceeds of sale) to the right qualifying people and in the right manner
  4. you are unmarried

WATCH THIS SPACE!

Laws of Intestacy

Who inherits your estate on your death depends on your marital status, your children and the surviving members of your immediate family.

The information on these web pages and downloads apply only to England & Wales.  The laws of intestacy are different in Scotland and Northern Ireland.  The intestate estate will be distributed according to rules dating back to 1925 (in England & Wales).  Who inherits your estate on your death depends on your marital status, whether you have children and the surviving members of your immediate family.

The statutory legacies below (the £250,000 or £450,000 gift to the surviving spouse or Civil Partner) were only recently raised on 1st February 2009 (they were previously set to £125,000 and £250,000 respectively in 1993) in order to reduce the 4000 cases each year where a spouse is in danger of losing their home due to the low statutory legacy.

Note, however, that any person who is financially dependent on the deceased, whether they inherit on intestacy or not, could make a claim through the courts under the Inheritance (Provision For Family And Dependents) Act 1975.

Laws of Intestacy Flowchart

Please follow this link to download a flowchart of the Laws of Intestacy.

Intestacy Situations

The following situations are summarised below:

  • Single Person

  • Living Together

  • Married or in Civil Partnership - No Children

  • Married or in Civil Partnership - With Children

General Rules

The following General Rules refer to the boxes in "Laws of Intestacy" diagram.

  • The spouse will benefit if he/she survives the intestate by 28 days, otherwise the estate will be dealt with as if there had been no spouse (*).

  • If a class of relative existed but has died, then if they had had children, those children will inherit equally what would have been their parent’s share - per stirpes (**).  Cousins (but, if deceased, their descendants) are the remotest relatives that can inherit under the laws of intestacy.

  • Within each class of relative, relatives of the full blood (i.e.  they share the same parent) take preference over half blood (i.e.  only one parent in common.)

  • In-laws have no rights.

  • Legally adopted children have the same rights as their adopted parent's natural children, but lose all rights to their birth parents’ Estates.

  • Stepchildren and foster children have no automatic rights.

  • Common Law Husbands / Wives are not recognised under intestacy law.  They have to go to Court if they wish to be allocated an inheritance.

  • Same sex partners are not (currently) recognised under intestacy law – unless in a Civil Partnership.  They have to go to court if they wish to be allocated an inheritance.

  • Children may only inherit from their 18th birthday (in England & Wales).

  • How beneficiaries will inherit jointly-owned assets is dependent on how that property (property, land, bank account, etc) is held.

Single Person

The entire estate is distributed in the following order: (If any relative is found at a level then the “search” stops and the entire estate is either distributed to that one relative or equally distributed to the relatives found).

  • Children (but if deceased then their descendants, if any)

  • Parents

  • Brothers & Sisters (but if deceased then their descendants, if any)

  • Half Brothers & Half Sisters

  • Grandparents

  • Aunts & Uncles (but if deceased then their descendants, if any)

  • If no Cousins (or their descendants) then it goes to the Treasury.

Living Together - (Heterosexual or Same Sex)

Regardless of how long a couple have lived together, or if there are children involved, under intestacy law they are currently classed as single.  Their partners have no automatic inheritance rights.  They inherit nothing!

Married or in Civil Partnership - No Children

For married couples with no children the surviving spouse inherits the entire estate.

Married or in Civil Partnership - With Children

For married couples with children the entire estate is distributed as follows:

  • The surviving spouse gets the first £250,000 plus goods and all personal chattels.

  • The surviving spouse gets half of the remaining estate.

  • The other half goes to the deceased's children immediately (or on trust until they are 18.)

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