Inheritance Tax (IHT)

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Inheritance Tax (IHT)

Standard thresholds2019/202020/21
Nil rate band - Up to £325,000 0% 0%
Over £325,000 40% 40%

Combined Thresholds for married couples & Civil Partners

Threshold2019/202020/21
Nil rate band - Up to £650,000 0% 0%
Over £650,000 40% 40%
Residence nil-rate band £150,000 £175,000

Main Exemptions

  1. The first £3,000 per donor of lifetime transfers in any tax year plus any unused balance from previous year.
  2. Gifts of up to but not exceeding £250 per year to any number of persons.
  3. Gifts in consideration of marriage or civil partnership of: up to £5,000 by a parent, up to £2,500 by a grandparent or more remote ancestor or a party to the marriage, or up to £1,000 by any other person.
  4. Gifts made from income that form part of normal expenditure.
  5. Gifts to charities, whether made during lifetime or on death

Main Reliefs

DetailsRates
Business or interest in a business 100%
Qualifying shareholdings in unquoted companies 100%
A transfer out of shares controlling more than 50% of the voting rights in a listed company. 50%
Land and buildings, plant and machinery used by transferor's controlled company or partnership 50%
Land and buildings, plant and machinery used in a business and held in a trust in which the donor has an interest in possession. 50%
Agricultural property 100% or 50%

Please note that there are strict qualifying criteria which must be satisfied in order to take advantage of the above reliefs. Please contact us to discuss ways of planning your affairs such that you will qualify for reliefs where possible.

[1] There Is no official nil rate band for couples. The bands illustrate that for couples, the unused element of a deceased person’s nil rate ban can be utilized by the surviving spouse or civil partner.

[2] A lower rate of 36% applies where 10% or more of a deceased person’s net estate is left to charity and some lifetime gifts are taxed at 20%.

[3] A further nil rate band may be available in relation to current or former residences. Nil rate bands of surviving spouses/civil partner may be increased by unused nil rate bands of deceased spouses/ civil partners. However, for estates worth more than £2m, this allowance will reduce by £1 for every £2 of the excess amount.

Our service to you

If you are a self employed, business owner/director of company looking to get your accountancy and taxation matters sorted, look no further. We are pro-active and easily accessible accountants and tax advisors, who will not only ensure that all your filing obligations are up to date with Companies House and HMRC, but also you do not pay a penny more in taxes than you have to. We work on a fixed fee basis and provide same day response to all your phone and email enquiries. We will also allocate a designated accounts manager who would have better understanding of your and business financial and taxation affairs. Book a free consultation call using the link below.

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