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Inheritance Tax

green tick box No restrictions or changes to the Inheritance Tax (IHT) reliefs available.
green tick box The residence nil-rate band will increase as planned from 6 April 2018.
The nil-rate band has remained frozen at the same rate since 2009.


Every year it seems we worry over speculation of changes to IHT reliefs; reducing agricultural or business reliefs for example.  However we are pleased to say there have been no changes or restrictions announced in the Autumn Budget, in fact the Chancellor decided not to tinker with the current IHT system at all.

The IHT nil-rate band, above which 40% IHT is due, continues to remain at £325,000 per person.  The relief has remained at this level since 2009.

The residence nil-rate band which was introduced on 6 April 2017 will increase, as previously announced, to £125,000 per person on 6 April 2018.  This extra main residence allowance is available to cover a person’s main residence if it is passes down to a direct descendent on death (i.e. a child or grandchild).  The relief will gradually increase up to £175,000 by 2020/2021.

This amount is transferable to a surviving spouse or civil partner, like the existing nil-rate band, but will be reduced for net estates of over £2,000,000 at a rate of £1 for every £2 over the threshold.  ‘Will’ planning can be essential to ensure a couple’s combined estate receives the maximum residence nil-rate band available.

IHT can be a complex matter, however planning can be undertaken to ensure your exposure to any liabilities is minimised.  If you would like to review your position please do not hesitate to contact one of our Tax Specialists on 01228 711888.