Sarah Bradford considers the impact that the Chancellor’s announcement that the IHT nil-rate band and residence nil-rate are to be frozen until April 2026 may have on those looking to pass on their family home.
Inheritance tax (IHT) is only payable where the value of the chargeable estate exceeds the available nil-rate bands.
There are potentially two types of IHT nil-rate bands available – the ‘standard’ nil-rate band and the residence nil-rate band (RNRB).
The nil-rate band
The standard nil-rate band has been frozen at its current level of £325,000 since 2008/09. It was due for a review in 2021; however, along with a number of other allowances and thresholds, it is to remain at this level until April