Demystifying…Inheritance Tax Nil Rate Band


The nil band (or Inheritance Tax threshold) is the amount up to which an estate will have no Inheritance Tax to pay. The band is currently £325,000 and in the case of married couples/civil partners, legislation currently allows claiming of the unused IHT nil rate band on the first death where all assets pass to the surviving spouse. This doubles the nil rate band on second death, and for many this will mean no IHT, as the total estate will be below £650,000 (based on the current threshold).

However, if the estate – including any assets held in trust and gifts made within 7 years of death – is more than the threshold, Inheritance Tax will be due at 40% on the amount over the nil rate band, the exception being those who leave 10% or more of their net estate to charity where the tax due may be paid at a reduced rate of 36 per cent.

Contact Damian Evans for specific inheritance tax advice…