Policy paper

Inheritance Tax: main residence nil-rate band and the existing nil-rate band

This tax information and impact note affects individuals with direct descendants and personal representatives of deceased persons, with total assets above the Inheritance Tax threshold.

• From: HM Revenue & Customs
• Published: 8 July 2015
• Last updated: 12 June 2017 — See all updates

Documents

Inheritance Tax: main residence nil-rate band and the existing nil-rate band

HTML

Draft clause 44

PDF, 109 KB, 8 pages

Draft explanatory notes clause 44

PDF, 93.9 KB, 6 pages

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Details

The draft Finance Bill 2016 clause and Explanatory notes were published on 9 December 2015.

This measure introduces an additional nil-rate band when a residence is passed on death to a direct descendant. This will be:

• £100,000 in 2017 to 2018
• £125,000 in 2018 to 2019
• £150,000 in 2019 to 2020
• £175,000 in 2020 to 2021

It will then increase in line with Consumer Price Index from 2021 to 2022 onwards. Any unused nil-rate band will be transferred to a surviving spouse or civil partner. It will also be available when a person downsizes or ceases to own a home on or after 8 July 2015 and assets of an equivalent value, up to the value of the additional nil-rate band, are passed on death to direct descendants.

Further details of these proposals are in a technical note on the Inheritance Tax main residence nil-rate band and downsizing proposals.

Published 8 July 2015
Last updated 12 June 2017 + show all updates

1. 12 June 2017

   Details in the ‘More information’ section of the ‘Inheritance Tax: main residence nil-rate band and the existing nil-rate band’ guidance have been amended.

2. 30 March 2017

   New hyperlink to 'Residence nil-rate band Guide' added to the more information section.

3. 9 December 2015

   Draft clause 44 and explanatory note 44 added to the page.

4. 8 July 2015

   First published.