Estates—inheritance tax

Introduction to IHT

For a quick guide to the basics of the inheritance tax (IHT) regime and a broad overview of UK tax rates, exemptions, basic nil rate band (NRB), residence nil rate band (RNRB), transferable NRB and RNRB, agricultural property relief (APR), business property relief (BPR), the reduced 36% tax rate for estates which include at least 10% gifts to charity, the territorial scope of IHT, restrictions on deducting loans and debt, lifetime gifts, small gifts relief, the use of trusts and compliance procedures, see Practice Note: Introductory guide to IHT.

See also Practice Note: Case study—IHT calculation on death.

The charge on death

The IHT charge on death falls under two headings:

•
the additional charge—which arises on the chargeable lifetime transfers and the potentially exempt transfers (PETs) made in the seven years before death, and
•
the estate charge—which arises on the value of all the property the deceased owns (or is deemed to own) immediately before death

The calculation and apportionment of IHT due on death can be complex, especially taking account of trust interests, chargeable lifetime transfers, the potential mix

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Private Client News

Private Client weekly highlights—23 October 2025

This week’s edition of Private Client highlights includes: (1) amendments to the Non-Contentious Probate Rules 1987 which come into force on 3 November 2025; (2) the Office of the Public Guardian publishes guidance on investigatory limits and alternative remedies; (3) analysis of the High Court decision in SKAT v Solo Capital Partners, which confirms the importance of factual evidence when establishing claims for misrepresentation; (4) the Scottish government publishes commentary on Assisted Dying Bill amendment; and (5) the signing of a new tax treaty between the UK and Portugal.

Question of the week: What are the tax implications of parents selling their main residence at an undervalue to their son?

This Q&A considers the tax implications of parents selling their main residence at an undervalue to their son.

FTT expresses preference for Martland over Medpro in late appeal decision (Lands Luo Ltd v HMRC)

Tax analysis: In Lands Luo Ltd v HMRC, the First-tier Tax Tribunal (FTT) granted permission for a late appeal against refusal of a VAT repayment claim. Late appeals are common, but this one is interesting because of the recent uncertainty arising from the Upper Tribunal’s (UT) decision in Medpro and, perhaps relatedly, because the FTT panel in this case included the Senior President of Tribunals.

FTT refuses to reinstate appeal that had been withdrawn by the taxpayer during the original hearing (Scott Brothers Ltd v HMRC)

Tax analysis: In Scott Brothers Ltd v HMRC, the First-tier Tax Tribunal (FTT) dismissed an application by the company to reinstate its appeal. The company had withdrawn its appeal following the first day of the original hearing.