Published On: Mon, Sep 2nd, 2019

Can Inheritance Tax allowance be transferred? How you could increase threshold by hundreds | Personal Finance | Finance

The standard Inheritance Tax rate is 40 per cent. However, this is only usually payable on the portion of an estate above a specified threshold. This is, at the time of writing, normally £325,000. That said, if the deceased has left everything above this threshold to their spouse, civil partner, a charity or a community amateur sports club, then there usually won’t be Inheritance Tax to pay.

It may be possible to increase a person’s threshold.

For instance, if a person gives their home to their children or grandchildren, then the threshold can rise to £475,000.

Some people may wonder what happens if their threshold will be unused – and in these cases, whether it can be transferred to someone else.

If they are married or in a civil partnership, then it may be possible to add any unused threshold to their partner’s threshold, when they die.

This could mean that the surviving partner will go on to have an increased threshold when they die, up to a maximum of £950,000.

Who is Inheritance Tax paid to?

The tax must be paid to HM Revenue and Customs (HMRC).

The deadline for doing so is the end of the sixth month after the deceased person has died.

If the person is making payments on a trust, then there are different Inheritance Tax due dates.

Should the tax not be paid by the due date, HMRC will charge interest.

Elsewhere on the topic of bereavement, some people may wonder whether Premium Bonds can be transferred after a person has died.

NS&I explain that it is not possible to transfer Premium Bonds.

Children’s Bonds and Individual Savings Accounts are the other NS&I savings products which cannot be transferred.

Premium Bonds are an investment product which sees holders, who must invest at least £25, being entered into a monthly draw.

The odds of winning for each £1 Bond number stands at 24,500 to 1.

READ MORE: Premium Bonds: NS&I reveal August’s UK millionaires – could you have scooped maximum?

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