New ‘Residential Nil Rate Band’ explained
24 May 2016
Under the current Inheritance Tax regime, on death the first £325,000 of each individual's net estate is taxed at 0%. This is known as the "nil-rate band" ("NRB"). Unless any tax reliefs apply, the rest of their net estate is then taxed at 40%.
For couples who are married or in a civil partnership, if the first to die has not used their full NRB, the allowance can be transferred to the surviving spouse, effectively providing them with a tax-free allowance of up to £650,000. This most typically occurs when the first to die leaves their entire estate to the surviving spouse, as gifts between spouses are usually entirely tax-free.
For the full article, click here.