Threshold

Transfer value death rate chargeable lifetime transfer
£1 – £325,000 0% 0%
Over £325,000 40% 20%
Reduced rate where 10% or more of estate is left to charity or amateur sports body 36%

 The £325,000 figure is referred to as the IHT threshold or nil rate band.(IHTA 1984 s 7 and Sch 1).

A husband and wife each have a (transferable) nil rate band of £325,000.

This means that an unused part of a deceased spouse’s nil rate band goes to the surviving spouse (IHTA 1984 s 8A).

Annual gifts of up to £3,000 per donor, are exempt.