Inheritance Tax (IHT)

Inheritance Tax (IHT) is the tax payable on an Estate once the owner of the Estate, the Testator, has passed away. The tax payable is 40% of the value above the nil rate band (NRB) which was fixed in 2009 at £325,000.00 per person and will remain fixed at that amount until 2028.

If more than 10% of the net value is passed to a registered charity, the tax payable is reduced to 36% and again, is only payable on the amount above the NRB value.

Any unused NRB of a deceased Spouse or Civil Partner can be transferred to the survivor of the two. Which provides for a NRB amount of up to £650,000.00.

Residential Nil Rate Band

In addition to their NRB, passing a qualifying residential property to a direct descendant can provide the residential nil rate band (RNRB) of up to £175,000.00 totaling the untaxable estate value to £500,000.00 per person.

In cases where a NRB is transferred and the Estate also qualifies for a RNRB, the total amount of an estate passing without being subject to paying IHT could be up to £1,000,000.00.

If the total value of the Estate is greater than £2,000,000.00, however, then a taper is aportioned to the RNRB to be used. For every £2.00 above £2,000,000.00, the RNRB is reduced by £1.00.

Will & Tess Will Writers in Gillingham Kent

For more information regarding the fixed NRB for any person who passed away before April 2009, please see below.

NRB & RNRB Value by Year