An inheritance tax is a tax on the estate of someone who has died, including all property, possessions and money. There are three forms of Inheritance tax:
Nil Rate Band: This is the maximum tax free allowance, NRB is a fixed rate allowance until 2021
Transferable NRB: This is the amount of remaining estate of a deceased person that does not use up all of the NRB they are entitled to. In this instance, when a spouse dies and they leave everything to their surviving spouse that amount is exempt from the tax, the NRB is then transferred to the spouse to work out liability for their estate.
Residence NRB: The RNRB applies to individuals with direct descendants who have an estate (including a main residence) that exceeds the inheritance tax (IHT) threshold (or nil-rate band) of £325,000 for 2019/20.
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