What was the nil-rate band in 2008?

Inheritance Tax thresholds — from 18 March 1986 to 5 April 2026

How much money can you inherit before you have to pay taxes on it UK?

The standard Inheritance Tax rate is 40%. It’s only charged on the part of your estate that’s above the threshold. Example Your estate is worth £500,000 and your tax-free threshold is £325,000. The Inheritance Tax charged will be 40% of £175,000 (£500,000 minus £325,000).

What is the inheritance tax threshold for 2022 UK?

£325,000
Tax rates and allowances The Government has previously announced that the inheritance tax (IHT) threshold will remain frozen at £325,000 until 2021/2022. The rate remains at 40%. In April 2017, the Government introduced an additional nil-rate band when a residence is passed on death to a direct descendant.

What is RNRB allowance?

The so-called Residence Nil Rate Band (RNRB) is a recent but potentially very valuable allowance for Inheritance Tax (IHT).

What will the residence nil rate band be in 2021?

The RNRB acts as a top-up to the current IHT NRB (2021/22 – £325,000) and works in a similar manner by reducing the value of your estate that is subject to IHT at the full rate of 40%.

When was the IHT nil rate band introduced?

The transferrable Nil Rate Band was introduced in the Finance Act 2008 and is available where someone has died on or after 9 October 2007, even if their spouse or civil partner died before this date.

Do I have to inform HMRC if I inherit money?

Yes. You’ll need to notify HMRC that you’ve received inheritance money, even if no tax is due. If it is, you’ll be expected to pay the tax within six months of the death of your loved one. This will normally be taken out of the deceased’s estate, and the executor will usually take care of it.

Who qualifies for RNRB?

In order to qualify, you must own a property or a share in a property, which you have lived in at some stage and which you leave to your direct descendants (including children, grandchildren or step-children). For estates over £2 million, the RNRB is reduced at the rate of £1 for every £2 over £2 million.

When can you claim RNRB?

The RNRB is only available if the residence is left to one or more direct descendants. This will be the case if it is left to them on death in the deceased’s will, under the rules of intestacy or by some other legal means as a result of the person’s death.

What happens to Margaret’s IHT allowance when Peter dies?

Peter’s death leaves Margaret with his full basic allowance, giving her £650,000 of IHT protection. She puts the £650,000 into a discretionary trust for John. On her death, John can add this to his own £325,000 allowance.

Can a widowed spouse claim an additional IHT allowance?

The transfer of allowances has meant this practice has more or less died out. However, widowed spouses who remarry can still use it to give themselves an additional IHT allowance of £325,000, shielding even more from the taxman.

What is the inheritance tax threshold from 1914 to 2026?

The Inheritance Tax Threshold from 1914 to 5th April 2026 (or Inheritance Tax ‘ nil rate band ‘) is the amount up to which an estate will have no Inheritance Tax to pay. Information on the Transferable Nil Rate Band is HERE.

How much can John and Margaret add to her tax-free allowance?

John also ringfences his own allowance through a trust, so Margaret can add his £325,000 to her allowance if he were to die first. Now the surviving spouse will pass on £975,000 tax-free.