Inheritance tax Thresholds

Inheritance Tax (IHT) is complicated and difficult to navigate without expert advice. In this guide we will try to make things as clear as possible for you.

Inheritance tax Thresholds

To first understand the tables it is a good idea to understand the personal allowances. Everybody has a personal allowance for Inheritance Tax – this is called the nil rate band. Inheritance Tax only applies to the part of your estate valued above the nil rate band. This is why many people don’t leave behind an Inheritance Tax bill when they die.

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    How much is the nil rate band?

    The nil rate band is currently £325,000 per person and will remain at this amount until April 2026. However, your nil rate band may be reduced by any gifts you made in the seven years before your death.

    The residence nil rate band

    The residence nil rate band is an allowance for passing on the family home that was introduced in April 2017. It only applies to the family home (not a second home or buy-to-let property) and can only be used when passing on assets to direct descendants.

    The residence nil rate band currently stands at £175,000 and will remain at that level until April 2026. The allowance is tapered down for people with larger estates – it reduces by £1 for every £2 that your estate is valued over the £2 million mark.

     

    Allowances can be transferred between spouses

    Both the nil rate band and the residence nil rate band can be transferred between married couples and civil partners when one spouse dies, regardless of how long ago this happened. Any individual can have a maximum of two nil rate bands and two residence nil rate bands. However, these can be transferred from multiple deceased spouses for people who have had several marriages or civil partnerships.

    Both allowances are transferred as percentages, rather than explicit amounts of money. These rules can be very complex and you might need to take action to benefit from them, so you should consider speaking to a financial planner if you’d like to know more.

     

    Inheritance Tax Tables

    Tables of Inheritance Tax Thresholds & Additional Nil Rate Band
    Inheritance Tax thresholds – from 18 March 1986 to 5 April 2026

    FROM
    TO
    NIL RATE BAND
    FROM
    TO
    NIL RATE BAND
    From 6 April 2009
    5 April 2026
    £325,000
    From 6 April 2008
    5 April 2009
    £312,000
    From 6 April 2007
    5 April 2008
    £300,000
    From 6 April 2006
    5 April 2007
    £285,000
    From 6 April 2005
    5 April 2006
    £275,000
    From 6 April 2004
    5 April 2005
    £263,000
    From 6 April 2003
    5 April 2004
    £255,000
    From 6 April 2002
    5 April 2003
    £250,000
    From 6 April 2001
    5 April 2002
    £242,000
    From 6 April 2000
    5 April 2001
    £234,000
    From 6 April 1999
    5 April 2000
    £231,000
    From 6 April 1998
    5 April 1999
    £223,000
    From 6 April 1997
    5 April 1998
    £215,000
    From 6 April 1996
    5 April 1997
    £200,000
    From 6 April 1995
    5 April 1996
    £154,000
    From 10 March 1992
    5 April 1995
    £150,000
    From 6 April 1991
    9 March 1992
    £140,000
    From 6 April 1990
    5 April 1991
    £128,000
    From 6 April 1989
    5 April 1990
    £118,000
    From 15 March 1988
    5 April 1989
    £110,000
    From 17 March 1987
    14 March 1988
    £90,000
    From 18 March 1986
    16 March 1987
    £71,000

    Inheritance Tax additional threshold/residence nil rate band – from 6 April 2017 to: 5 April 2026

    FROM
    TO
    NIL RATE BAND
    FROM
    TO
    NIL RATE BAND
    From 6 April 2020
    5 April 2026
    £175,000
    From 6 April 2019
    5 April 2020
    £150,000
    From 6 April 2018
    5 April 2019
    £125,000
    From 6 April 2017
    5 April 2018
    £100,000

    The information on this page is subject to change by HM Government last updated 5th April 2021. 

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