Inheritance Tax

Inheritance Tax Thresholds

Inheritance Tax is a tax on the estate (the property, money and possessions) of someone who’s died.

If the estate’s value is below the threshold you’ll still need to.

If you give away your home to your children (including adopted, foster or stepchildren) or grandchildren.

If you’re married or in a civil partnership and your estate is worth less than your threshold, any unused threshold can be added to your partner’s threshold when you die. This means their threshold can be as much as £1 million.

 

Inheritance Tax Rates

The standard Inheritance Tax rate is 40%. It’s only charged on the part of your estate that’s above the threshold.

*Values are subject to change

Capital Gains Tax

Tax Rates – Individuals

2020-21

2021-22

Gains to basic rate limit

10%

10%

Gains above basic rate limit

20%

20%

Tax Rate – Trusts and Estates (1) Exemptions

20%

20%

Individuals, estates, etc

£12,000

£12,300

Trusts generally

£6,000

£6,150

Entrepreneurs’ Relief – Gains taxed at 10% up to lifetime limit of

£1 million

£1 million

Investors’ Relief – Gains taxed at 10% up to lifetime limit of

£10 million

£10 million

  1. Rates are increased by 8% for gains on residential property and carried interest.

Inheritance Tax

Inheritance Tax

2020-21

2021-22

Nil-rate band

£325,000

£325,000

Residence nil-rate band (1)

£150,000

£175,000

Rate of tax on excess

40%

40%

Chargeable lifetime transfers Annual gifts of up to £3,000 are exempt

20%

20%

  1. Up to 100% of the unused proportion of a deceased spouse’s/civil partner’s nil-rate band can be claimed on the survivor’s death
  2. 36% where at least 10% of net estate left to charity

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