Domesday Live

Inheritance tax: how the rate has changed

Property and wealth. Inheritance tax is charged on the part of an estate above the nil-rate band. The rate is 40% on the part above it, or 36% if enough is left to charity. Gifts to a spouse are exempt. Since 2017 a second allowance applies when a home is passed to children or grandchildren. Before 1975 the tax was called estate duty, and from 1975 to 1986 capital transfer tax.

Worth knowing

• The nil-rate band has been £325,000 since 2009 and is frozen until April 2031.
• From April 2026 the 100% relief on farms and businesses is capped at £2.5 million of qualifying assets, with 50% relief above that. From April 2027 unused pension pots count towards the estate.
• Estate duty had steeper rates, up to 80% on the largest estates, which are not shown. The table of thresholds goes back to 1914.