New UK Laws Impacting Wills and Estate Planning in 2024

 

The UK government introduced several new laws and regulations impacting Wills and Estate Planning in 2024.

Here are some key changes you should be aware of:

Increase in Inheritance Tax Nil-Rate Band

In April 2024, the inheritance tax nil-rate band, which is the threshold below which no inheritance tax is payable, increased to £500,000 if you leave it to your children (including adopted, foster or stepchildren) or grandchildren or if your estate is worth less than £2 million.

• This change aims to provide relief for more families and ensure that a larger portion of estates can left to your beneficiaries without being subject to inheritance tax.

The Digital Assets Inheritance Act (draft legislation)

This draft legislation  provides that “a thing (including a thing that is digital in nature) is capable of being an object of personal property rights even though it is neither (a) a thing in possession, nor (b) a thing in action.”

• This means that you should take your digital assets into account when drafting or reviewing your will as they are now classed as personal property, even though they don’t physically exist.

Changes to Intestacy Rules

The government has updated the intestacy rules, which dictate how an estate is distributed if someone dies without a valid will. The new rules, effective from April 2024, increase the statutory legacy (a fixed sum of money) that a surviving spouse or civil partner receives, from £270,000 to £322,000. Additionally, the rules now provide for the inclusion of stepchildren as potential beneficiaries in certain circumstances.

• This means that a spouse or civil partner will receive 50% of the remaining assets or personal effects; the other 50% will fall to the children in equal shares.

Expansion of the Residence Nil-Rate Band

The residence nil-rate band, introduced in 2017 to provide an additional inheritance tax allowance for passing on a main residence to direct descendants, has been expanded. As of April 2024, the allowance has been increased from £100,000 to £175,000 per individual.

These new laws and regulations highlight the importance of regularly reviewing and updating your will to ensure it remains compliant and in line with your wishes. Bees and Co are your estate planning experts. We understand how these changes may impact your specific circumstances and will discuss them with you so that together we can make any necessary adjustments to your will and estate plan, contact us today.

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