Skip to content

Inheritance Tax

  • IHT may be payable when an individual’s estate is worth more than the IHT nil rate band when they die.
  • Lifetime and death transfers between UK domiciled spouses are exempt from IHT.
  • For 2017/18, a further nil rate band of £100,000 may be available in relation to current or former residences.
  • The IHT threshold available on death may be increased for surviving spouses as there may have been a nil rate band not used, or not fully used, on the previous death.
  • There are reliefs for some business and farming assets which reduce their value for IHT purposes.
  • IHT may also be payable on gifts made in an individual’s lifetime but within seven years of death.
  • Some lifetime gifts are exempt.
  • Transfers of assets into trust made in an individual’s lifetime may be subject to an immediate charge but at lifetime rates.
  • There are also charges on some trusts.

IHT rates and nil rate band 2018/19 and 2017/18

IHT nil rate£325,000
Lifetime rate20%
Death rate40%
Death rate if sufficient charitable legacies made36%

IHT reliefs for lifetime gifts

Annual exemption £3,000
Small gifts £250
Marriage
– parent£5,000
– grandparent£2,500
– bride/groom£2,500
– other£1,000

IHT – reduced charge on gifts within seven years of death

Years before death % of death charge
0-3100
3-480
4-560
5-640
6-720

Disclaimer

This publication is published for the information of clients. It provides only an overview of the regulations in force at the date of publication and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material contained in this publication can be accepted by the authors or the firm.

Company Information Walker Thompson is a trading name of Walker Thompson Ltd registered in England and Wales. Company registration number 06574838

Registered Office Empress House :: 43a Binley Road :: Coventry CV3 1HU :: T 024 7663 5522 :: F 024 7663 5518 :: E clientcare@walkerthompson.co.uk