The Inheritance Tax threshold (or 'nil rate band') is the amount up to which an estate will have no Inheritance Tax to pay.
If the estate - including any assets held in trust and gifts made within seven years of death - is more than the threshold, Inheritance Tax will be due at 40 per cent on the amount over the nil rate band. From 6 April 2012 people who leave ten per cent or more of their net estate to charity can choose to pay a reduced rate of Inheritance Tax of 36 per cent.
This page shows the different thresholds in use for deaths going back to 1914.
Up to £325,000 (£325,000) (“nil rate band”) 0% (0%)
Over £325,000 (£325,000) (frozen to 2017/18) 40% (40%)
A surviving spouse or civil partner may claim the unused proportion of an earlier deceased spouses’ or civil partners’ nil rate band, up to the current nil rate band.
A reduced rate of 36% applies when 10% or more of a net estate is left to charity.
Reduced charges apply on lifetime gifts within seven years of death.