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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.
- PART 3
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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