Tax Rates & Allowances

Tax Rates & Allowances

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Inheritance Tax

The nil rate band for inheritance tax (IHT) will be frozen at £325,000 until April 2026, and the rates of IHT payable on death will stay unchanged at 40% or 36% if at least 10% of the net estate is donated to charity.
The government will consult on expanding the existing IHT exemption for military forces members whose death is caused or hastened by injuries while on active duty to members of the emergency services.
From 2017/18, a new nil-rate band (the'resident nil rate band' (RNRB)) was created, which applies when a residence is inherited to direct descendants on death. Between 2017/18 and 2021/22, the RNRB will be phased in as follows:

• £100,000 in 2017/18
• £125,000 in 2018 /19
• £150,000 in 2019/20
• £175,000 in 2020/21
• £175,000 in 2021/22
• £175,000 in 2022/23
• £175,000 in 2023/24

The value of RNRB is tapered away at £1 for every £2 by which the value of the total estate exceeds £2 million.