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Inheritance Tax
| Inheritance Tax Threshold | ||||
|---|---|---|---|---|
| 2019-20 | 2018-19 | |||
| Amount | Rate | Amount | Rate | |
| Death Rate | Up to £325,000 | Nil | Up to £325,000 | Nil |
| Over £325,000 | 40% | Over £325,000 | 40% | |
| Lifetime Rate | Up to £325,000 | Nil | Up to £325,000 | Nil |
| Over £325,000 | 20% | Over £325,000 | 20% | |
| Please note on the death of the first spouse or civil partner any unused nil rate band allowance is transferred to the remaining spouse or civil partner. Example: If the deceased spouse hasn’t used any of their nil rate band the remaining spouse or civil partner’s nil rate band increases to £650,000 |
Notes
- 40% band rate is reduced to 36% where 10% or more of the net estate is left to charity.
- Chargeable lifetime transfers are initially charged at 20%.
| Additional Main Residence Inheritance Tax Threshold | ||
|---|---|---|
| 2019-20 | 2018-19 | |
| Death Rate | £150,000 | £125,000 |
Notes
- The main residence band was introduced on the 6th April 2017.
- It is only valid on the main residence and where the recipient of the home is a direct descendent (Children, Step-children, Grandchildren).
- This additional allowance increases the threshold to £475,000 and £950,000 for couples.
- On properties valued between £1M and £2M inheritance tax will be paid as normal on the amount above the tax-free amount.
- For properties valued more than £2M for every £2 above £2M you will lose £1 of the main residence allowance.
| Reliefs | |||
|---|---|---|---|
| 2019-20 | 2018-19 | ||
| Annual exemption | £3,000 | £3,000 | |
| Small gifts | £250 | £250 | |
| Marriage / Civil Partnership |
Parent | £5,000 | £5,000 |
| Grandparent | £2,500 | £2,500 | |
| Bride / Groom | £2,500 | £2,500 | |
| Other | £1,000 | £1,000 | |
| Reduced charge on gifts within seven years of death |
||
|---|---|---|
| Years before death | % of death charge | Effective Rate % |
| 0-3 | 100% | 40% |
| 3-4 | 80% | 32% |
| 4-5 | 60% | 24% |
| 5-6 | 40% | 16% |
| 6-7 | 20% | 8% |
Note
- Lifetime gifts to unit trusts are, subject to the NIC rate band, chargeable at half of the death rate increasing on the above scale if death occurs within 7 years.
Click Here 
to download the current tax year's abacus Tax Tables pdf booklet
Click Here to download the previous tax year's abacus Tax Tables pdf booklet
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