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Nil rate band


Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
tag-icon Autumn Budget 2024

Nil rate band


Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
tag-icon Autumn Budget 2024
imgtext

Nil rate band (NRB) ― principles

Inheritance tax is charged at the rate of 40% on estates at death or at half that rate, 20%, on chargeable lifetime transfers. The NRB is an important relief which assigns a rate of 0% to the lower portion of an estate or transfer.

Generally, inheritance tax only becomes payable if the chargeable transfer exceeds the NRB in force at the time the transfer is made. In order to determine whether a transfer exceeds the NRB, it is added to the transferor’s previous chargeable transfers in the preceding seven years. This is known as the cumulation principle.

See Example 1.

The NRB is currently £325,000. This threshold has applied from 6 April 2009 and it is intended to remain at that level until 5 April 2030.

Thresholds in previous years can be found at inheritance tax thresholds and interest rates.

Every individual is entitled to a NRB regardless of their domicile or residence status.

An estate on death may also qualify for some or all of the unused

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  • 03 Feb 2025 07:00

Home/ Tolley Tax Guidance/ Trusts and Inheritance Tax / Understanding the key concepts of IHT

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