What is the Inheritance Tax Threshold (Nil Rate Band)?

The nil rate band is the amount each person can pass free of Inheritance Tax. For the 2024 to 2025 tax year, it stands at £325,000. Assets above this threshold are potentially liable to IHT at 40%, subject to other available exemptions and reliefs.

Can the nil rate band be increased?

Transfer of Nil Rate Band (TNRB)

Where the first of a married couple to die did not use all of their nil rate band, the unused proportion can be transferred to the surviving partner’s estate. This can effectively double the nil rate band to £650,000 on the second death.

Residence Nil Rate Band (RNRB)

An additional allowance of up to £175,000 per person is available where a qualifying residential property passes to a direct descendant. Combined with the standard NRB (and potentially the TNRB), the total IHT-free threshold can reach £1 million for some married couples.

YouCanDoProbate calculates the nil rate band available to your estate accurately, including any TNRB and RNRB that apply, and builds this into the IHT400 automatically.