Nil rate band

Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance

Nil rate band

Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
imgtext

Nil rate band (NRB) ― principles

Inheritance tax is charged at the rate of 40% on estates at death or at half that rate, 20%, on chargeable lifetime transfers. The NRB is an important relief which assigns a rate of 0% to the lower portion of an estate or transfer.

Generally, inheritance tax only becomes payable if the chargeable transfer exceeds the NRB in force at the time the transfer is made. In order to determine whether a transfer exceeds the NRB, it is added to the transferor’s previous chargeable transfers in the preceding seven years. This is known as the cumulation principle.

See Example 1.

The NRB is currently £325,000. This threshold has applied from 6 April 2009 and it is intended to remain at that level until 5 April 2030.

Thresholds in previous years can be found at inheritance tax thresholds and interest rates.

Every individual is entitled to a NRB regardless of their domicile or residence status.

An estate on death may also qualify for some or all of the unused

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+

Popular Articles

Substantial shareholding exemption ― overview

Substantial shareholding exemption ― overviewThe substantial shareholdings exemption (SSE) provides a complete exemption from the liability to corporation tax on the gains generated from qualifying disposals of shares and interests in shares by qualifying companies. No claim is required. Provided

14 Jul 2020 13:44 | Produced by Tolley Read more Read more

Research and development expenditure credit (RDEC)

Research and development expenditure credit (RDEC)This guidance note provides information on how research and development expenditure credits (RDEC) are calculated and utilised. The Qualifying expenditure for R&D tax relief guidance note provides information on what expenditure qualifies for

14 Jul 2020 13:24 | Produced by Tolley in association with Will Sweeney Read more Read more

Winding up a trust ― legal, administrative and compliance issues

Winding up a trust ― legal, administrative and compliance issuesOverviewWhen winding up a trust, there are legal formalities and compliance issues that need to be dealt with, as well as IHT and CGT consequences that flow from the termination. This guidance note considers when and how a trust comes

14 Jul 2020 14:01 | Produced by Tolley Read more Read more