If you are married or in a civil partnership and have chosen for your residuary estate to pass to your spouse or civil partner, the interview will automatically ask you whether you wish to include a gift of your tax-free allowance in your will. The tax-free allowance is also known as the nil rate band and is currently set at £325,000.
In the majority of cases, the answer will be ‘no’; the allowance will simply pass to your spouse or civil partner to be used on their death.
There are some circumstances, however, where a gift of the tax-free allowance may be appropriate. Examples include highly appreciating assets or where there is more than one marriage or civil partnership.
If you do choose to include a gift of the tax-free allowance, the interview will ask you who is to receive the gift. The choices are:
If you think you would like to make a gift of your nil rate band to a different person or to a category of people not listed here, this might require special drafting, such as the creation of a discretionary trust, and you should seek proessional advice.
For more information, see our page Nil rate band.