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Inheritance Tax

Inheritance Tax

Categories & Thresholds 2023/2024 2024/2025
Rates of Tax on Death Transfers
Nil rate band £325,000 £325,000
Residence nil rate band £175,000 £175,000
Rate 40%* 40%*
- Lifetime transfers to and from certain trusts 20% 20%
Main Exemptions
Normal expenditure out of income No limit No limit
Transfers to - UK-domiciled spouse/civil partner No limit No limit
Transfers to - Non-UK-domiciled spouse/civil partner (from UK-domiciled spouse) £325,000 £325,000
Transfers to - UK-registered charities No limit No limit
Annual exemption per donor £3,000 £3,000
Small gifts exemption £250 £250
Wedding/Civil Partnership Gifts
Wedding/civil partnership gifts by - Parent £5,000 £5,000
Wedding/civil partnership gifts by - Grandparent £2,500 £2,500
Wedding/civil partnership gifts by - Other person £1,000 £1,000
Business Relief
100% relief: businesses, unlisted/AIM companies, certain farmland/building
50% relief: certain other business assets

* A lower rate of 36% applies where at least 10% of deceased's net estate is left to charity.