Inheritance tax (IHT) may be payable when an individual’s estate is worth more than the IHT nil rate band when they die.
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 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.
All the IHT rates and reliefs are unchanged from 2015/16.
Standard nil rate band: £325,000
|Death rate if sufficient charitable legacies made||36|
Reliefs for lifetime gifts
Annual Exemption: £3,000
Small Gifts: £250
Marriage: The amount of relief depends on who the gift is from…
|Gift from||Amount (£)|
Reduced charge on gifts within seven years of death
|Years before death||% of death charge|