What is the nil rate band (NRB) for IHT?

• A. £250,000
• B. £150,000
• C. £500,000
• D. £325,000

Answer: (D)

Nil rate band refers to the amount of an estate that is exempt from Inheritance Tax on death. The standard NRB is set at £325,000, meaning an estate valued at or below that amount can pass without IHT. If the estate value exceeds £325,000, IHT is charged at 40% on the excess, after any reliefs and exemptions are applied. The NRB can be transferred to a surviving spouse or civil partner on the first death, potentially increasing the amount available on the second death to £650,000. There is also a separate Residence Nil Rate Band (up to £175,000) for main residences left to direct descendants, but that relief sits alongside the NRB rather than replacing it.