What is the nil-rate band?
Quick answer
The nil-rate band is the slice of an estate that is taxed at 0% for inheritance tax — currently £325,000 per person. Anything above the available bands is taxed at 40%. Any unused percentage of the nil-rate band transfers to a surviving spouse or civil partner, so couples can effectively double it. It is frozen until April 2031.
Detailed explanation
It's the foundation of inheritance-tax planning: the amount everyone can pass on tax-free.
- £325,000 per individual, taxed at 0%.
- Transferable nil-rate band: the unused share passes to a surviving spouse, so a couple commonly has £650,000 before the residence band is even counted.
- Certain lifetime gifts within seven years of death can use up part of the band first.
Example scenario
When Bill dies leaving everything to his wife, none of his £325,000 nil-rate band is used (spouse transfers are exempt). On her later death, her estate can claim 100% of his unused band on top of her own.
What happens next?
- Complete the questionnaireA few guided questions about you, your family and your wishes.
- Human reviewYour answers are checked by the ClearLegacy editorial team for completeness.
- Receive your documentsYour will and supporting paperwork are produced, ready to print.
- Sign correctlyClear instructions on signing and witnessing so the will is legally valid.
- Protect your familyYour wishes are recorded and your loved ones are spared the intestacy default.
Sources
- GOV.UK — How Inheritance Tax works: thresholds, rules and allowances
- GOV.UK — Inheritance Tax: residence nil rate band
- HMRC — Inheritance Tax statistics 2024/25
- Reviewed by
- ClearLegacy editorial team
- Last reviewed
- June 2026
- Next review
- December 2026
- Jurisdiction
- England & Wales
See your estate's risks in 3 minutes.
The free ClearLegacy Estate Risk Assessment flags the gaps that cause disputes, delays and tax.
Check my estate risk