Inheritance Tax

Inheritance Tax Rates

The IHT nil rate band remains fixed at £325,000 until the end of 2027/28. Holding the threshold at the same amount for 19 years (from 6 April 2009) will bring far more people into the scope of the tax. However, the £175,000 ‘residential nil rate band enhancement’ on death transfers can reduce the impact where it applies. A married couple may now be able to leave up to £1 million free of IHT to their direct descendants (£325,000 plus £175,000 from each parent), but the rules are complicated, and the prospect of the nil rate band being fixed for another 4 years increases the importance of proper IHT planning.

Simplification

Normally, personal representatives of estates have to pay Inheritance Tax before they can obtain a grant of probate, which means that they may have to borrow money to pay the tax as they cannot access the assets without the grant. From 1 April 2024, an administrative change will allow personal representatives to apply for a ‘grant on credit’ from HMRC, avoiding the need to take out a commercial loan.

Find more about The Spring Budget here:

The Spring Budget 2024 is here!