The following Private Client guidance note provides comprehensive and up to date legal information covering:
Produced in partnership with Lucy Edwards of Penningtons Manches LLP and now maintained by Lexis®PSL
Each person's estate is exempt from inheritance tax (IHT) up to a certain threshold, called the nil rate band (NRB), which is £325,000 for the tax year 2019–20. It will be frozen at this level until 5 April 2021. Prior to 9 October 2007, if the value of the chargeable transfer on a person's death did not use up all of their available NRB (either because their estate was less than the NRB or was left to an exempt beneficiary) its tax-saving benefit would not be fully realised.
For example, it is common for spouses to leave their entire estates to each other under their Will (and in the absence of a Will, a significant amount, if not all of the estate, passes to the surviving spouse under the intestacy rules). The spouse exemption from IHT means that this is not a chargeable transfer and so would not use any of the NRB. As a result the NRB of the first spouse to die was often wasted and the survivor would only have their own NRB to set against the value of their combined estates on their death.
Under sections 8A–8C of the Inheritance Tax Act 1984
**Trials are provided to all LexisPSL and LexisLibrary content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
0330 161 1234
To view our latest legal guidance content,sign-in to Lexis®PSL or register for a free trial.