Inheritance Tax

Standard thresholds 2016-17 2017/18 2018/19
Nil rate band - Up to £325,000 0% 0% 0%
Over £325,000 40%* 40%* 40%*

Combined thresholds (for marrried couples and civil partners) #

2016-17 2017/18 2018/19
Nil rate band - Up to £650,000 0% 0% 0%
Over £650,000 40%* 40%* 40%*

* A lower rate of 36% applies where 10% or more of a deceased person's net estate is left to charity and some lifetime gifts are taxed at 20%.

# There is no official nil rate band for couples.  The bands illustrate that for couples, the unused element of a deceased person’s nil rate band can be utilised by the surviving spouse or civil partner.

Main Exemptions

1. The first £3,000 per donor of lifetime transfers in any tax year plus any unused balance from previous year.

2. Gifts of up to but not exceeding £250 per year to any number of persons.

3. Gifts in consideration of marriage or civil partnership of: up to £5,000 by a parent, up to £2,500 by a grandparent or more remote ancestor or a party to the marriage, or up to £1,000 by any other person.

4. Gifts made out of income that form part of normal expenditure.

5. Gifts to charities, whether made during lifetime or on death.

Main Reliefs

Business or interest in a business 100%
Qualifying shareholdings in unquoted companies 100%

A transfer out of shares controlling more than 50% of the voting rights in a listed company.

50%
Land and buildings, plant and machinery used by transferor's controlled company or partnership 50%
Land and buildings, plant and machinery used in a business and held in a trust in which the donor has an interest in possession. 50%
Agricultural property 100% or 50%

Please note that there are strict qualifying criteria which must be satisfied in order to take advantage of the above reliefs. Please contact us to discuss ways of planning your affairs such that you will qualify for reliefs where possible.

For 17/18, a further nil rate band of £100,000 may be available in relation to current or former residences. Nil rate bands of surviving spouses/civil partner may be increased by unused nil rate bands of deceased spouses/ civil partners.

For 18/19, a further nil rate band of £125,000 may be available in relation to current or former residences. Nil rate bands of surviving spouses/civil partner may be increased by unused nil rate bands of deceased spouses/ civil partners.

Disclaimer:  This App and its contents have been produced as a helpful reference point.  The information should be used as a guide only and your specific circumstances are best discussed directly with us.

No reliance should be placed on this material and no action should be taken without seeking the appropriate professional or legal advice. Although the authors make reasonable efforts to ensure the content of this App is accurate and up-to-date, the authors make no representations, warranties or guarantees that the content is accurate, complete or up-to-date and accept no responsibility whatsoever for any loss occasioned by anyone acting on information within this App.