Inheritance Tax Rates

The latest Inheritance Tax Rates 2018/19 can be found in the summary table below

Nil rate band (NRB)*£325,000£325,000
NRB Residential enhancement (RNRB)†*125,000100,000
Rate of tax above nil rate band**40%40%
Lifetime transfers to most trusts20%20%

†RNRB is available for transfers of a main residence to direct descendents. It tapers away at the rate of £1 for every £2 of estate value above £2m.

*Up to 100% of the proportion of a deceased spouse’s/civil partner’s unused NRB and RNRB band may be claimed to increment the current NRB and RNRB when the survivor dies.

**Rate reduced to 36% if at least 10% of the relevant estate is left to charity. Unlimited exemption for transfers between spouses/civil partners, except if UK domiciled transferor and foreign domiciled transferee, where maximum exemption £325,000.

100% Business Property Relief (BPR) for all shareholdings in qualifying unquoted trading companies, qualifying unincorporated trading businesses and certain farmland/buildings.

Reduced tax charge on gifts within 7 years before death

Years before death0-33-44-55-66-7
% of full death tax charge payable10080604020

Annual exemptions for lifetime gifts include £3,000 per donor and £250 per recipient.

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