• 2024/25

  • Inheritance tax (IHT)

    • 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.
    • A further nil rate band of £175,000 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 first 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 2024/25 and 2023/24

    IHT nil rate £325,000
    Lifetime rate 20%
    Death rate 40%
    Death rate if sufficient charitable legacies made 36%

    IHT reliefs for lifetime gifts

    Annual exemption £3,000
    Small gifts £250
    Marriage/civil partnership
    - parent £5,000
    - grandparent £2,500
    - other spouse/civil partner £2,500
    - other £1,000

    IHT - reduced charge on gifts within seven years of death

    Years before death % of death charge
    0-3 100
    3-4 80
    4-5 60
    5-6 40
    6-7

    20