The 30th October 2024 UK Budget announced significant changes to inheritance tax in relation to pensions, agricultural and business property relief, and “non-doms”. It is important to review your will regularly.
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Category: Wills
It is important to review wills regularly to take into account, amongst other things, any changes in legislation.
Currently, UK Inheritance Tax is a domicile-based system. A government Policy Paper originally published on 29th July stated that the government intends to replace this with a new residence-based system from 6 April 2025. Another document published by the government on 31st July stated that officials will seek further feedback through a series of separate engagement sessions on Inheritance Tax with confirmation of the final design of these policies to be published at Budget.
The next Budget is due to take place on 30th October 2024.
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What follows are 6 occasions on which you should review your English and Welsh will.
- Marriage
If you marry, your existing will is automatically revoked. This is unless your will was written in contemplation of that marriage and an appropriate clause is included in the will to state this. - Divorce
If you divorce, any gifts in your will to your former spouse or civil partner are made void. Also void are any appointments of them as an executor, trustee, or guardian. You should also review your will planning if a beneficiary of yours divorces or is in the process of going through a divorce. - Sell or move home
A home, for many people, is their most valuable asset. If you no longer own that asset it is a good idea to review your will – you might want to leave a different asset to your beneficiaries instead. Also, if you store your will at home, it is important that it does not become lost during the move! - Change in family circumstances
Relationships change over the years and unfortunately friends and family we were once close to may drift away or die. On a happier note, new potential beneficiaries are born, new relationships formed, and previous relationships repaired. Your will should be reviewed as your circumstances change. - Change in the law
If tax law changes and your will isn’t kept up to date your estate may end up paying more inheritance tax (IHT) on your death. For example, in 2017 there was a change to UK IHT which introduced the residence nil rate band – an IHT allowance that can be available where your home is gifted to your children (or other direct descendants). If your will contains provisions that create a trust on death, it is important to review these if trust law changes. - Every 3 to 5 years
Review your estate plan every 3-5 years to make sure that your will still matches your current wishes.
When thinking about making a will for the first time, a lot of attention will be paid to who will benefit from which assets. However, there are other things you can set out in your will.
Here are three of them:
- Appointing guardians for minor children
You can make provision in your will for how your minor children are brought up and by whom. - Funeral wishes
Why leave it to your loved one to guess when you can set out your funeral wishes in writing in your will? - Executors
The executors of an estate have many duties and responsibilities including arranging the funeral, applying for a grant of probate, dealing with tax returns, and paying any inheritance tax which is due. Your will gives you the opportunity to set out who those people should be. Importantly, they should be people you trust.
The above points were written in relation to England & Wales.