The chancellor’s autumn statement confirmed that the current Inheritance Tax threshold will be frozen until at least April 2028. This follows a previous announcement freezing it until April 2026.

The two-year extension to the lower limit means that more families will be required to pay Inheritance Tax as more estates exceed the nil rate band of £325,000.

Inheritance Tax levels

Inheritance Tax is generally payable at the rate of 40% on the part of someone’s estate over the threshold of £325,000. If the deceased left 10% or more of their estate to charity, the rate is reduced to 36%.

No Inheritance Tax is payable on assets over £325,000 left to a spouse or civil partner. If the deceased’s spouse or partner has already died and did not use their full £325,000 allowance, then the unused portion can be transferred to the survivor’s estate, meaning that the survivor’s estate could potentially have a total allowance of £650,000.

If a property is left to immediate descendants such as children or grandchildren, then a further £175,000 allowance, known as a residence nil-rate band’, is available for the estate of both spouses. This means that there is a total potential allowance of £1 million available for a couple.

No Inheritance Tax is payable on money left to charity.

Freezing the Inheritance Tax threshold

It is estimated that as the value of estates rises, as many as 10,000 more estates could end up paying some Inheritance Tax.

Jason Hollands, managing director of the online investment and coaching service Bestinvest suggests that the continuing freeze on the Inheritance Tax threshold is a “significant wealth tax”.

He said: “Ever more people who would never have imagined being hit with death duties are finding that their parents or grandparents’ estates are becoming subject to these taxes, especially given the strong rise in property and share prices over recent decades.”

Planning for the future

Inheritance Tax is something which you should consider at the time you make your Will. Your solicitor will be able to ensure that your estate is structured in the best way possible and will be able to advise you on how to safely pass on assets to your loved ones.

If you wish to reduce the amount of Inheritance Tax payable, they can also discuss the giving of lifetime gifts, which will only attract Inheritance Tax if they are made in the seven years prior to death.

If you would like to speak to one of our expert estate planners, ring us on 01634 353 658 or email us at