Temple Wealth No Comments

Ten Years and Counting

Temple Wealth celebrated 10 years as a new business on 21st September.  Planned celebrations have been lost in lockdown but the achievements have not.

What a 10 years it has been, we began in 2010 with two Advisers, two paraplanners and an administrator to currently 18 Advisers, 10 Paraplanners, 2 sales support, 2 administrators and a Finance Manager with lots of changes to the industry along the way.

There has been the advent of Diploma Qualifications for Investment Advisers, the banning of commission, vast changes in pension, the mortgage directive, to name but a few, but we are still alive and kicking. 

A big “thank you” to Sense Network for believing in us at the outset and its support ongoing which has seen the Company be part of the Parliamentary Review for Best Practice in Financial Services and achieve Corporate Chartered Status in 2017. 

The next 10 years will see more changes no doubt but you can always count on Temple Wealth management to be your financial partner for life and we wouldn’t want it any other way.

We would like to share our celebrations with our clients, both existing and new by asking you to like and share this post with your friends and colleagues with a chance to win £50 M&S voucher. 

Anyone who likes the post on social media will be entered into the draw which closes at midnight on Thursday 8th October with the winner being drawn at random and notified on 9th October 2020.

Temple Wealth No Comments

Government Green Homes Grant Scheme

While the stamp duty holiday and ‘Eat out to help out’ scheme stole the headlines in Chancellor Rishi Sunak’s Summer Economic Update in early July, an overlooked incentive was the Green Homes Grant Scheme. This is where homeowners and landlords will be able to apply for vouchers towards the cost of energy-saving improvements to their properties.

Read more
Temple Wealth No Comments

How does the Help to Buy scheme work?

Since its inception in 2013, the Help to Buy scheme has been used to help with the purchase of currently over 236,000 properties.

It’s designed to help first-time buyers onto the housing ladder and home movers up a rung. Independent analysis shows that both the rate of take-up and the size of equity loans being given are growing.

Read more
Temple Wealth No Comments

Personal Injury Trust

This piece discusses a Personal Injury Trust, who it is appropriate for, when it is likely to be used and how it is set up.

A Personal Injury Trust is a specific type of Trust used when, in most cases, someone has received compensation for some type of accident or injury.

Read more
Temple Wealth No Comments

Inheritance tax – What is the main residence nil rate band?

Inheritance tax can cost loved one’s thousands of pounds in the event of your death, yet it’s possible to legally avoid huge swathes of it, or possibly pay none at all.


Benjamin Franklin said “the only things certain in life are death and taxes”
Inheritance Tax (IHT) touches on both.

My first entry is to do with the main IHT allowances, and to explain the new main residence nil rate band allowance, namely who is entitled to the new allowance and what it is all about.

The most important thing to do is examine whether you’ll pay inheritance tax and what to do about it. The following could help you to decide to reduce your potential Inheritance Tax bill or do nothing at all. The rules discussed here include the Government rule changes introduced by George Osbourne in 2015 that now give people an extra property allowance.

Inheritance tax is the tax paid on assets (after inheritance tax allowances are deducted) left when someone dies.

Where to start?

A good place to start from is by making sure that your WILL is up to date, and it details who is to benefit from your estate when you are gone. Reviewing it periodically will ensure that as your estate increases in value, the planning is an ongoing process to prevent you passing your hard-earned wealth to HMRC and not your family when you have died.

Firstly, you need to assess how much your estate is worth, then deduct your debts from this to give the value of your estate. Your assets include: cash in the bank, investments, any property or business you own, vehicles and pay-outs from life insurance policies, your entire wealth.

Every individual living in the UK is entitled to a £325,000 Inheritance Tax Nil Rate band.

On death, when your estate value is added up and valued above £325,000, anything above £325,000 it is currently taxed at 40%.

A married couple’s Executors on death would able to claim two Nil Rate Bands making a nil rate band total of £650,000; and if they qualify, would be able to also claim from the 2017/18 tax year the Main Residence Nil Rate band (which, from April 2020, is a further £175,000 each – making an individual’s total Nil Rate band of £500,000 and a married couple’s £1,000,000).

So, this would exclude most estates from any payment of Inheritance tax. But, and there are always buts, there are certain conditions around the Main Residence Nil Rate Band and in Part 1 the following should explain this in some detail for you, and you could see if you qualify for this added tax benefit.

How does the new ‘main residence nil-rate band’ work?

New for the 2017/18 tax year was the additional ‘main residence’ allowance. Known as the residence nil rate band. It is only valid on a main residence and where the recipient of a home is a direct descendant (classed as children, step-children and grandchildren). This is gradually being phased in and is what you’ll get on top of your existing allowance.

For the tax year 2019/20, it’s starting at £150,000 (meaning a total allowance of £475,000), rising by £25,000 in 2020 until it reaches £175,000 (meaning a total allowance of £500,000).

So, in 2019/20 tax year, the maximum that can be passed on tax-free is £950,000 for married couples or those in a civil partnership, £475,000 for others. For singles, this is made up of the existing £325,000 Nil Rate Band, plus the extra £150,000.

For couples, when the first one dies their allowance is passed to the survivor, so that £475,000 is doubled to £950,000.

By the 2020/21 tax year, the tax-free amount will rise to £1 million for couples (made up of £325,000 x 2 plus £175,000 x 2) and £500,000 for singles (made up of £325,000 plus £175,000), as the main residence allowance rises.

In the 2019/20 tax year, everyone can leave an estate valued at up to £325,000 plus the new ‘main residence’ band of £150,000 giving a total allowance of £475,000 per person. From the 2020/21 tax year the residence band will rise to £175,000 making a total of £500,000 each in total. So, for any estate valued under this their beneficiaries won’t pay inheritance tax. The amount is set by the Government and is called the nil-rate band, because it’s the amount you pay a ‘nil-rate’ of IHT on.

The Main Residence Nil Rate Band (RNRB) is for generational passing down of the benefit – namely the property in your WILL has to be passed to sons and daughters, blood line. If it is not, then it cannot pass the test and you would only be eligible for the standard IHT NRB of £325,000 and not the main residence NRB of £175,00 from April 6th, 2020. (current Main Residence Nil Rate Band is an added £150,000 from April 6th, 2019)

Above that amount, anything you leave behind is subject to tax of 40% (or 36% if you leave at least 10% of your assets to a charity).

For example…

If you leave behind assets in 2019/20 worth £500,000 (assuming you have just one property), your estate pays nothing on the first £475,000, and 40% on the remaining £25,000 – a total of £10,000 in tax – if you’re not leaving anything to charity. Officially, the £325,000 limit has been frozen until at least 2020/21, while the additional main residence allowance will be phased in until April 2020.

On estates worth between £1 million and £2 million, inheritance tax will be paid as normal on the amount above the tax-free amount. On estates worth £2 million or more, homeowners will lose £1 of the ‘main residence’ allowance for every £2 of value above £2 million. So, for a couple, properties worth £2,350,000 or more will get no additional allowance.

So, how much tax do you pay?

Your estate will owe tax at 40% on anything above the £325,000 inheritance tax threshold when you die (or 36% if you leave at least 10% to a charity) – excluding the ‘main residence’ allowance (see below). Some simple actions can save you thousands, yet sadly many people ignore it, either not wanting to consider the future or simply unable to broach it with relatives for fear of seeming grasping.

Former Chancellor of the Exchequer George Osborne revealed in July 2015’s Summer Budget that he’d scrap the duty when parents or grandparents pass on a home worth up to £1 million (£500,000 for singles). This is being phased in gradually, reaching a £1m exemption for couples in the tax year 2020/21.

The current nil rate band allowance is charged on the first £325,000 (per person) of someone’s estate – which is the value of their total assets they leave behind when they die. Couples can leave a home worth £650,000 without it attracting inheritance tax (singles £325,000). Above the threshold, the charge is 40%. This remains unchanged. What is new is the introduction of a new ‘main residence’ band.

Exemptions from inheritance tax

People in certain ‘risky’ roles are exempt from paying inheritance tax if they die in active service. Included in this are armed forces personnel, police, firefighters and paramedics, plus humanitarian aid workers.

The exemption also comes into play if a person who was injured on active service has their death hastened by the injury, even if they’re no longer on active service.

Other questions that need answering are:

When you die, assets left to your spouse or registered civil partner, provided they’re living in the UK, are exempt from inheritance tax. On top of this, your partner’s inheritance tax allowance rises by the proportion of your allowance that you didn’t use, meaning together a couple can currently leave £950,000 tax-free.

What if I’m not married? – While transfers of property and other assets between married couples or civil partners don’t attract inheritance tax, this isn’t the case for unmarried couples. If you’re not married, but own assets jointly with another person, the situation gets complicated, especially where a residential property is involved. Your liability to pay IHT will depend on whether you and your partner own the property as ‘joint tenants’ or ‘tenants in common’ and whether there’s a will.

If you’re joint tenants – (you both own all the property), and your partner’s left you everything in the will, then if your partner’s assets, including the property, exceed the £450,000 inheritance tax threshold, you’d have to pay it on any assets in the estate above that. After your partner’s death, your property would then be owned by you in its entirety.

If your partner didn’t leave a will – thanks to something called the ‘right of survivorship’, the property would still go entirely to you although the inheritance tax rules above would still apply. However, your partner’s family would still have a claim to his or her share of other assets such as insurance policies and pension investments.

A good place to start is with your WILL and needs to state clearly who is to be the beneficiary of your estate following your death. Your estate includes your hard-earned property that includes everything from savings investment and property of all types. For Inheritance Tax all your property as far as HMRC is concerned means the value of all worldwide held assets including property held in the UK.

Next quarter I will follow up with the HMRC permitted allowances for inheritance tax and how they can play a part in reducing your final inheritance tax bill, as well as the gifting allowances and other available solutions you can use. In the meantime, enjoy the Spring and the coming Summer months.

As an Independent Financial Adviser, I would be pleased to assist with any questions you might have.

Most importantly, if you found this interesting and want to know about all the solutions now then please contact me, David Rackham, at david.rackham@templewealth.co.uk or on 01329 282882 / 07734 17268, where I would welcome your call.

The Financial Conduct Authority does not regulate Inheritance Tax Planning or Wills. Level of taxation may be subject to change and their value depends on your individual circumstances. The content of this article is for information purposes only and based on our current understanding of legislation, which are subject to change.