Inheritance Tax

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Inheritance Tax

Threshold (Nil Rate Band) 325,000 325,000
Residence Nil-Rate Band* 100,000 N/A
Rates of Inheritance Tax
Up to NRB 0% 0%
Chargeable lifetime gifts where in excess of the NRB 20% 20%
On death where in excess of the NRB 40% 40%
Total annual gifts (for each donor) 3,000 3,000
Small gifts (for each donee)
250 250
Gifts made from surplus income Unlimited Unlimited
In consideration of marriage
Gift by a parent 5,000 5,000
Gift by a grandparent 2,500 2,500
Gift by any other person 1,000 1,000
Gifts made to individuals and certain types of trust are potentially exempt, provided the donor survives for seven years. If they die within that period taper relief (below) is available if the gift is taxable.
Complete years % charged to IHT
0 100%
1 100%
2 100%
3 80%
4 60%
5 40%
6 20%
7 0%

* The residence nil-rate band is in addition to the existing nil-rate band and only available when a residence is passed on death to a direct descendent. There will be a tapered withdrawal of the additional nil-rate band for estates with a net value of more than £2 million. This will be at a withdrawal rate of £1 for every £2 over this threshold.

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