If an English or Welsh domiciled person dies without leaving a Will, the amount that a surviving spouse or civil partner can inherit as a statutory legacy under the intestacy rules, is now increasing from £270,000 to £322,000. This increase came into effect on 26 July 2023.

This statutory legacy only comes into play if the deceased also has children – the spouse or civil partner receives £322,000 and the deceased’s personal possessions, plus 50% of the remainder of the estate. The children receive the other 50% of the remainder. An exception applies where property is jointly owned. If there are no children, the spouse or civil partner will inherit the whole estate.

Example

Noah died intestate leaving an estate valued at £900,000. He is survived by his spouse, Emma, and two children. Emma inherits a total of £611,000 (£322,000 plus 50% of the remainder), and the two children will share £289,000.

Controversy

The statutory legacy is reviewed every five years, and the next review is due in January 2025. However, the five-year review period is overridden if inflation increases by 15% or more. The trigger point should have been December 2022, but inflation then fell in January 2023 before again going over 15%.

The 26 July uplift is seven months late, and some surviving spouses and civil partners will receive £52,000 less as a result of the delay. A House of Lords committee has raised the matter with the relevant authority, the Ministry of Justice, asking how such shortfalls will be dealt with.

Importance of leaving a Will

The importance of leaving a valid Will can be seen by looking at those who have no automatic right of inheritance:

  • Unmarried partners;
  • LBGT partners not in a civil partnership;
  • Relations by marriage;
  • Close friends and Carers.

Close relatives other than children only inherit in certain circumstances.

The intestacy rules differ for those domiciled in Scotland or Northern Ireland.

The government has created an online tool to check who will inherit if someone dies without leaving a valid Will. This can be found here.

How can we help?

If you have any questions relating to how inheritance tax might affect you, then please contact us on 01444 716946 or on 01273 963656, or alternatively email us here for help.