Last updated on:
March 17, 2024
The Inheritance Tax (IHT) Allowance specifies the maximum amount of assets you can inherit without incurring Inheritance Tax from someone who has died.
For the tax year 2023/2024, this allowance is set at £325,000.
However, there are scenarios where the IHT Allowance may be higher:
- When inheriting a primary residence from a parent or grandparent, the allowance may increase to £500,000.
- Should one parent leave their entire estate to the surviving parent, their allowances combine, potentially raising the total IHT Allowance to £1,000,000.
It's essential to report the estate to HMRC if its value falls beneath the IHT Allowance, even if no Inheritance Tax is due.
Furthermore, assets passed between spouses or civil partners are exempt from Inheritance Tax, allowing for tax-free transfer of the entire estate.
