Inheritance tax nil rate band

The amount of an individual's estate (www.practicallaw.com/2-382-5620) or lifetime gift into a trust which is chargeable to inheritance tax (www.practicallaw.com/3-382-5648) (IHT) at 0% (that is, on which there is no IHT to pay).

If the value of an estate (including any chargeable transfers of value (www.practicallaw.com/9-382-5589) made within the 7 years before death) falls within the nil rate band, there is no IHT payable. Similarly, if the value of a lifetime gift into a trust (including any chargeable transfers of value made within seven years before the gift) falls within the nil rate band, there is no IHT payable. Where the value of an estate exceeds the nil rate band, the amount above the nil rate band is taxed at 40%. Where the value of a lifetime gift into trust exceeds the nil rate band, the amount above the nil rate band is taxed at 20%. For the current value and historic values of the nil rate band, see Tax data: inheritance tax: Nil rate band (www.practicallaw.com/6-385-5460).

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