Overview
Inheritance Tax can apply to an estate and to some lifetime transfers. The standard nil-rate band is £325,000 and the residence nil-rate band can add up to £175,000 where the conditions are met. Transfers between spouses or civil partners and reliefs for certain assets can change the result.
Who this applies to
Individuals considering estate planning, attorneys, executors and personal representatives.
Key points
- The standard rate on an estate is commonly 40%, with a reduced charitable rate potentially available.
- Keep records of gifts, dates and values.
- The residence nil-rate band has conditions and a taper for larger estates.
- Business and agricultural relief rules are complex and can change.
Important dates and deadlines
Reporting and payment deadlines depend on the estate and the type of transfer. Planning should take place well before a transaction or death rather than only when a return is due.
Practical checklist
- Prepare an asset and liability schedule.
- Record lifetime gifts and benefits retained.
- Review wills, ownership and nominations.
- Obtain valuations where appropriate.
- Coordinate tax advice with legal and financial planning.
Frequently asked questions
Can a couple always pass on £1 million tax free?
Not automatically. The available bands depend on the facts, qualifying residence, estate value and unused transferable amounts.
Are all gifts outside the estate after seven years?
The rules are more nuanced and some transfers, retained benefits and trusts need separate analysis.
How Accountants4All can help
Support matched to your circumstances
Accountants4All can organise financial records and tax calculations, working alongside solicitors and authorised advisers where legal or investment advice is needed.
Official sources and further reading
This page is general guidance and does not create an adviser/client relationship. Tax rules and official guidance can change. Use the official sources above and obtain advice based on your circumstances.
Read the full tax disclaimer