|
Inheritance Tax |
2024-25 |
2023-24 |
|
Nil rate band for individuals* |
£325,000 |
£325,000 |
|
Thereafter – lifetime gifts** |
20% |
20% |
|
– lower rate on death*** |
36% |
36% |
|
– on death |
40% |
40% |
|
Residence |
£175,000 |
£175,000 |
* Unused nil rate band can be used by surviving spouse or civil partner. This is currently frozen until April 2028.
** Increased to 40%, subject to tapering relief, on gifts made between 3 and 7 years pre death. Certain lifetime gifts are exempt. Special rules for business property.
*** A lower rate applies where 10% or more of the net estate is left to charity.
**** The inheritance tax main residence nil-rate band (MRNRB) was introduced in April 2017. The MRNRB allows for a £175,000 per person transferable allowance for married couples and civil partners when their main residence is passed down
to children after their death. The MRNRB is in addition to the existing £325,000 inheritance tax threshold.
Net estates over £2,000,000 have RNRB reduced by £1 for every £2 and lost when estate is £2,350,000.
|
Years before death |
0-3 |
3-4 |
4-5 |
5-6 |
6-7 |
|
% of death charge |
100% |
80% |
60% |
40% |
20% |
|
Recurring annual gifts out of surplus income |
|
|
Annual gifts out of capital (with one year carry forward if unused) |
£3,000 |
|
Small gifts (per recipient) |
£250 |
|
Parental gift on marriage |
£5,000 |
|
Grandparent or party to marriage |
£2,500 |
|
Other gifts on marriage (per donor) |
£1,000 |
Business Property Relief
|
Shares in unquoted companies (including USM/AIM stocks) |
100% |
|
– shareholding up to 50% |
none |
|
– shareholding over 50% |
50% |
|
Unincorporated business or interest in a business |
100% |
|
Land, buildings, plant and machinery used in the deceased’s business/company |
50% |
