Inheritance Tax Rates

Inheritance Tax2024-252023-24
Nil rate band for individuals*£325,000£325,000
Thereafter – lifetime gifts**20%20%
– lower rate on death***36%36%
– on death40%40%
Residence nil rate band****£175,000£175,000
* Unused nil rate band can be used by surviving spouse or civil partner. This band is currently frozen until April 2028.
** Increased to 40%, subject to tapering relief, on gifts made between 3 and 7 years pre death. Certain lifetime gifts are exempt. Special rules for business property.
*** A lower rate applies where 10% or more of the net estate is left to charity.
**** The inheritance tax main residence nil rate band (MRNRB) came into effect in April 2017. The MRNRB allows for a £175,000 per person transferable allowance for married couples and civil partners when their main residence is passed down to children after their death. The MRNRB is in addition to the £325,000 inheritance tax threshold.
Years before death0-33-44-55-66-7
% of death charge100%80%60%40%20%
Main exempt lifetime gifts
Recurring annual gifts out of surplus incomeunlimited
Annual gifts out of capital (with one year carry forward if unused)£3,000
Small gifts (per recipient)£250
Parental gift on marriage£5,000
Grandparent or party to marriage£2,500
Other gifts on marriage (per donor)£1,000
Business Property Relief
Shares in unquoted companies (including USM/AIM stocks)100%
Shares in quoted companies 
– shareholding up to 50%none
– shareholding over 50%50%
Unincorporated business or interest in a business100%
Land, buildings, plant and machinery used in the deceased’s business/company50%


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