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Inheritance Tax Relief

Inheritance Tax Relief

You’ve worked hard to build your estate - take control of who benefits from it.

Inheritance tax (or IHT) is the tax on the estate left behind when an individual passes away. An estate includes any property, money or other assets once any debts, such as a mortgage, have been paid off.

A certain amount of your estate can be passed on tax-free, which is known as the ‘nil rate band’. Currently, the nil rate band is £325,000 per person, which is frozen until 2021. Anything above this is subject to 40% IHT (or 36% if 10% or more of the estate is left to charity).

In April 2017, the government introduced an additional allowance which applies to the family home that is transferred to direct descendents, known as the Residence Nil Rate Band (RNRB). This allowance starts at £100,000 per person and will increase over four years to £175,000 per person. This will effectively raise the IHT-free allowance to £500,000 per person in 2020.

However, estates worth more than £2 million will be subject to a taper; for every £2 above £2 million, the RNRB will be reduced by £1. This means that joint estates worth £2.7 million and over will not benefit from the RNRB.

Our estate planning solutions provide you with the opportunity to obtain full IHT relief on your subscriptions after only two years. In addition, we provide an insurance policy that covers the first 20% of any net loss on death under 90 years during a minimum of the first two years – with no medical questionnaires or exclusions for pre-existing conditions.​

Tax rules are complicated. In many cases, certain personal circumstances may affect how a rule works for you. Any IHT planning should be undertaken in conjunction with a suitably qualified adviser.

Find out more about inheritance tax in our Guide to IHT.

Inheritance Tax Relief products

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Important Notice

Investing in our products will place your capital at risk and you may not get back the full amount invested. Any tax treatment may be subject to change and the availability and value of the reliefs depend on the individual circumstances of each investor. The availability of tax reliefs also depends on the investee companies maintaining their qualifying status.

Further information can be found at HMRC’s website. Neither past performance or forecasts are reliable indicators of future results and should not be relied upon. Unquoted or smaller company shares are likely to have higher price fluctuations and are likely to be more difficult to sell than shares quoted on the London Stock Exchange Official List. Website content is not intended to constitute investment, tax or legal advice. We recommend you seek independent advice before investing in any of our products.

Important Notice

Downing’s investments place your capital at risk and you may not get back the full amount invested. Past performance and forecasts are not a reliable guide to future results. Tax treatment may be subject to change and depends on individual circumstances. Smaller company shares are likely to have higher volatility and liquidity risks than other types of main market listed instruments. We recommend that you seek professional independent financial advice before investing. We do not offer investment or tax advice.

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