What is the nil rate band (NRB) for IHT?

What is the nil rate band (NRB) for IHT?

• A. £250,000
• B. £150,000
• C. £500,000
• D. £325,000

Answer: (D)

Nil rate band refers to the amount of an estate that is exempt from Inheritance Tax on death. The standard NRB is set at £325,000, meaning an estate valued at or below that amount can pass without IHT. If the estate value exceeds £325,000, IHT is charged at 40% on the excess, after any reliefs and exemptions are applied. The NRB can be transferred to a surviving spouse or civil partner on the first death, potentially increasing the amount available on the second death to £650,000. There is also a separate Residence Nil Rate Band (up to £175,000) for main residences left to direct descendants, but that relief sits alongside the NRB rather than replacing it.

Nil rate band refers to the amount of an estate that is exempt from Inheritance Tax on death. The standard NRB is set at £325,000, meaning an estate valued at or below that amount can pass without IHT. If the estate value exceeds £325,000, IHT is charged at 40% on the excess, after any reliefs and exemptions are applied. The NRB can be transferred to a surviving spouse or civil partner on the first death, potentially increasing the amount available on the second death to £650,000. There is also a separate Residence Nil Rate Band (up to £175,000) for main residences left to direct descendants, but that relief sits alongside the NRB rather than replacing it.