Inheritance Tax is payable if the deceased’s estate exceeds £325,000 (the Inheritance Tax Threshold). For married couples and Civil Partners, there is the opportunity to transfer unused Threshold from the first death. Please see https://www.gov.uk/inheritance-tax/leaving-assets-spouse-civil-partner.
Tax is charged at 40% of the value over the Inheritance Tax Threshold (or 36% if 10% or more of the estate is left to charity). Please see https://www.gov.uk/inheritance-tax/giving-to-charity-to-reduce-an-inheritance-tax-bill.
Recently the Government announced that the Inheritance Tax Threshold would be increased, but only in respect of a persons main home, this additional amount is known as the “Main Residence Nil Rate Band” and will be phased in as follows:
- £100,000 in 2017 to 2018
- £125,000 in 2018 to 2019
- £150,000 in 2019 to 2020
- £175,000 in 2020 to 2021
For further information go to https://www.gov.uk/government/publications/inheritance-tax-on-main-residence-nil-rate-band-and-downsizing-proposals-technical-note/inheritance-tax-on-main-residence-nil-rate-band-and-downsizing-proposals-technical-note