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Tax Rates & Allowances

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Inheritance Tax

The inheritance tax (IHT) nil rate band (NRB) will remain frozen at £325,000 until April 2028. The rates of IHT payable on death remain unchanged at 40% or 36% where at least 10% of the net estate is left to charity. 

An additional nil-rate band (the ‘residence nil rate band’ (RNRB)) applies where an individual dies after 5 April 2017 and their estate is above the NRB. The RNRB applies when the whole or part share in the deceased’s home is passed on death to direct descendants.The maximum value of the RNRB is the lower of: the value of the home passed on, and the amount in the table below 

Year of death  Value of RNRB
2017/18 £100,000
2018/19 £125,000
2019/20 £150,000
2020/21 £175,000
2021/22 £175,000
2022/23 £175,000
2023/24 £175,000

The value of RNRB is tapered away at £1 for every £2 by which the value of the total estate exceeds £2 million.This threshold is also frozen until 2027/28.

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