Inheritance Tax, the Transferable Nil-Rate Band and the Nil-Rate Band Discretionary Trust
The Inheritance Tax rules were recently changed, and changed radically, by the introduction of the Transferable Nil-Rate Band and the Nil-Rate Band Discretionary Trust.
This guide is intended for:
- married couples, civil partners, or their children, who want to understand how the Transferable Nil-Rate Band works, and how it might effect them or their family
- married couples or civil partners who are both still alive and who have made Wills which include a gift to someone else when the first of the couple dies, especially (but not only) a gift of the nil-rate band to a discretionary trust,
- a widow, widower or surviving civil partner, especially (but not only) whose late spouse or civil partner made a gift on death to someone else, and especially (but not only) a gift of the nil-rate band to a discretionary trust, whether by Will, intestacy or deed of variation, and
- anyone whose Will includes a gift of the nil-rate band (for instance, “the largest amount I can give without Inheritance Tax being paid”).
The Inheritance Tax (IHT) nil-rate band is the amount up to the IHT threshold. It is called this because tax is technically charged on it, but at the rate of ‘nil’ %. It is currently a maximum of £325,000.
Once you have read this guide, you should complete the checklist at the end, which will help you to decide what to do next.
In the guide the word “spouse” is used for brevity, but should be read as “spouse or civil partner”.
Download this guide (with action-point checklist) written by our senior partner Michael Cutler, a specialist in this field and a member of the prestigious Society of Trust and Estate Practitioners.