The Inheritance Tax Allowance is still currently £325,000.00 per person. However in April 2017 a new allowance was introduced called the Residential Nil Rate Band. This allowance is currently £125,000.00 per person reaching the maximum allowance of £175,000.00 by the tax year 2020/2021.
If an estate is left to a spouse or civil partner then there is no inheritance tax payable because of spouse exemption. Therefore the allowance can transfer to the surviving spouse’s estate. On the death of the surviving spouse/civil partner his or her estate will benefit from an allowance of £325,000.00 plus £175,000.00 (if the death is after 2020) plus the transferable nil rate band and the transferable residential nil rate band which were not previously used of the same amount. This will give a combined allowance of £1,000,000.00 before inheritance tax is payable.
There are certain criteria required to be eligible for the Residential Nil Rate Band Allowance and Tapering Relief for estates of a certain value
For more information please contact our private client department.