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,...

Will drafting and inheritance tax planning under the UK’s new residence-based IHT regime: RNRB, exemptions, trusts, grossing, PETs, APR/BPR and 36% charitable rate from April 2025

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Practice notes

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STOP PRESS: Abolition of non-dom regime and introduction of residence-based IHT regime

Finance Act 2025 (FA 2025), which obtained Royal Assent on 20 March 2025, enacts the removal of the remittance basis and introduces a residence-based taxation model from 6 April 2025, with effect from that date. FA 2025 likewise substitutes domicile as the principal criterion for determining Inheritance tax exposure. Additional reforms include, in particular, revisions to the rules defining excluded property, the removal of protected settlements status for offshore trusts, and key updates to overseas workday relief. For further detail on these measures, please see Practice Notes: The abolition of the remittance basis of taxation from 2025–26 and A new residence-based regime for IHT from 2025–26. See also: Finance Bill Tracking Service: Key dates (Finance Bill 2025) and Finance Act 2025. For many testators, understanding how inheritance tax (IHT) may affect their estate is a primary concern. IHT can apply to an estate on death and also to certain transfers made during lifetime. This Practice Note outlines frequently encountered IHT considerations, but is not intended to provide an exhaustive or highly detailed analysis of the rules. For more comprehensive guidance, see the Inheritance tax (IHT) and Estates—inheritance tax...

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Web page updated on 22/05/2026

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