Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Inheritance tax definition

What does Inheritance tax mean? Inheritance tax describes the taxation of wealth transfers on death and, in defined cases, on lifetime gifts and trust transfers. In the UK (England & Wales, Scotland and Northern Ireland), Inheritance Tax is a statutory regime under the Inheritance Tax Act 1984, charged at rates up to 40% on transfers of value. It is usually payable from the deceased’s estate by personal representatives. Lifetime charges arise on chargeable lifetime transfers (typically gifts into most trusts) and where a donor dies within seven years of a potentially exempt transfer. Key features include the nil-rate band and, where conditions are met,...

UK IHT: Nil Rate Band, Transferable NRB and Residence Nil Rate Band - Calculation, Claims, Time Limits, Domicile and Will Structuring

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Practice notes

Nil rate band (NRB) and transferable nil rate band (TNRB)

Each individual’s estate is assessed for Inheritance tax (IHT), but a portion is charged at zero per cent, known as the nil rate band (NRB). For the 2023–24 tax year this stands at £325,000. The government stated in the Autumn Statement 2022 that this figure will be held at the same level until 5 April 2028. See: Autumn Statement 2022—Private Client analysis—Key Private Client announcements.

Before 9 October 2007, where the Chargeable transfer on death did not fully use the deceased’s available NRB—either because the estate was below the threshold or assets passed to an exempt Beneficiary—the associated tax saving was not completely realised. A common illustration is spouses leaving their whole estates to each other under a Will; and, in the absence of a Will, a substantial share, if not the entire estate, often passes to the surviving spouse under the Intestacy rules. As transfers between spouses are exempt from IHT, such gifts are not chargeable transfers and therefore do not utilise any of the NRB...

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Web page updated on 22/05/2026

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