1Estate Details
2Beneficiary Information
Spouse exemption means no inheritance tax is due (transfers unused nil rate band)
Residence nil rate band of £175,000 may apply if the family home passes to direct descendants
3Lifetime Gifts (Last 7 Years)
Gifts made in the 7 years before death may reduce the nil rate band available to the estate.
UK Inheritance Tax Information
• Nil Rate Band: £325,000 (no IHT up to this amount)
• Residence Nil Rate Band: £175,000 (additional relief for family home)
• Tax Rate: 40% on amounts above the nil rate bands
• Spouse Exemption: No IHT between spouses/civil partners
• Annual Gift Exemption: £3,000 per year
Plan Your Estate Effectively
Our specialist probate and estate planning solicitors can help minimize inheritance tax liability while ensuring your wishes are properly documented.
Frequently Asked Questions
What is the current inheritance tax threshold?
The inheritance tax nil rate band is £325,000 for 2024/25. Additionally, there's a residence nil rate band of £175,000 when a family home is passed to direct descendants. This gives a potential total threshold of £500,000 per person, or £1 million for married couples.
Do I pay inheritance tax if I leave everything to my spouse?
No, there's no inheritance tax when you leave assets to your spouse or civil partner (provided they're UK domiciled). Additionally, any unused nil rate band transfers to the surviving spouse, potentially doubling their threshold.
How do lifetime gifts affect inheritance tax?
Gifts made within 7 years of death are potentially taxable and reduce the nil rate band available to your estate. However, there are annual exemptions (£3,000 per year) and other reliefs. Gifts surviving 7 years are generally free from inheritance tax.
What is the residence nil rate band?
The residence nil rate band is an additional £175,000 allowance available when you leave your family home to children or grandchildren. It's tapered away for estates over £2 million and can be transferred between spouses like the main nil rate band.
Are there ways to reduce inheritance tax legally?
Yes, several legitimate strategies exist including making use of annual gift exemptions, setting up trusts, making charitable donations (which can reduce the tax rate to 36%), and proper estate planning. Each situation is unique and requires professional advice.
When is inheritance tax due?
Inheritance tax is normally due 6 months after the end of the month in which death occurred. Some tax may need to be paid before probate is granted. Interest is charged on late payments, so it's important to plan for this significant expense.
Need Help with Your Legal Matter?
Our tools provide estimates and guidance, but every legal situation is unique. Speak with our qualified solicitors for personalized advice and professional legal services.
