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Inheritance Tax
The inheritance tax (IHT) nil rate band (NRB) is set at £325,000 as of April 2025. And at the Autumn Budget in October 2024 Chancellor Rachel Reeves announced Inheritance Tax thresholds will stay at their current levels for tax years 2028 to 2029 and 2029 to 2030. As a result, the following all stay the same in this period, barring any further tinkering by the Treasury from April 2025 onwards:
- nil-rate band at £325,000
- residence nil-rate band at £175,000
- residence nil-rate band taper, starting at £2 million
Inheritance Tax rates
There is a standard rate of 40% - this applies to the part of your estate about the relevant threshold.
The standard Inheritance Tax rate is 40%. It’s only charged on the part of your estate that’s above the threshold.
This rate drops to 36% on some of the assets but only if you pass on 10% or more of the ‘net value’ to charity in your will.
Residence Nil Rate Band
An additional nil-rate band (the ‘residence nil rate band’ (RNRB)) applies where an individual dies after 5 April 2017 and their estate is above the NRB. The RNRB applies when the whole or part share in the deceased’s home is passed on death to direct descendants. The maximum value of the RNRB is the lower of: the value of the home passed on, or the amount in the table below:
| Year of death | Value of RNRB |
| 2017/18 | £100,000 |
| 2018/19 | £125,000 |
| 2019/20 | £150,000 |
| 2020/21 | £175,000 |
| 2021/22 | £175,000 |
| 2022/23 | £175,000 |
| 2023/24 | £175,000 |
| 2024/25 | £175,000 |
| 2025/26 | £175,000 |
The value of RNRB is tapered away at £1 for every £2 by which the value of the total estate exceeds £2 million.
What our clients say about us...
"Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."
ALISTAIR FAIRWEATHER - PROGRAMME & PROJECT MANAGER, DELIVERING/RESCUING I.T. 7 BUSINESS CHANGE WITH BUDGETS UPTO £50M INC SUPPIER MANAGEMENT
"I couldn't ask for more from Paul as an Accountant. Paul has been accountant to Work Relief Charity Recruitment for just over a year now and is proving an invaluable asset. Accurate, knowledgeable, flexible with an emphasis on service delivery, I would recommend Paul's services to any organisation looking for an accounts professional."
Neil Price - Managing Director at Work Relief Charity Recruitment
"Paul was a referral from a family member when I started my business 2 years ago. As this was the first time I had ever run my own company I was totally clueless over the financial side of matters and was worried that I may have made mistakes in any of my accounting. I needn't have worried as after enaging Paul for a set monthly fee he was always there on the end of the phone for all sorts of questions I had and no matter how trivial they were Paul gave me all the information I required and more and did an excellent and painless job at the end of my first year! Couldn't ask for any better to be honest. Just two words - hire him!!!"
Lee Westrap MBCS - Director - Bulldog IT Services
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