Transferable Nil Rate Band
Currently, Inheritance Tax (IHT) is payable at 0% on the first £325,000 (this is called the nil rate band) and the remainder above £325,000 at 40%. The nil rate band is currently frozen until 2020. Any gifts between UK domiciled spouses are exempt from IHT. Since 2007 any unused Inheritance Tax nil rate band can be transferred from a late spouse’s estate to the surviving spouse’s estate when they die. This can give the surviving spouse’s estate a combined nil rate band of up to £650,000 in 2015/16, depending on the circumstances.