What is the rate of inheritance tax charged on the value above the nil-rate band (£325,000)?

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Multiple Choice

What is the rate of inheritance tax charged on the value above the nil-rate band (£325,000)?

Explanation:
The key idea is that the nil-rate band is the amount you can pass on without IHT. For individuals, anything above that threshold (£325,000) is taxed at the main IHT rate of 40%. So the rate charged on the value above the nil-rate band is 40%. Remember, there are reliefs (like transfers to a spouse or to charity, or the residence nil-rate band) that can reduce the overall tax, but the standard rate on the excess over £325,000 is 40%.

The key idea is that the nil-rate band is the amount you can pass on without IHT. For individuals, anything above that threshold (£325,000) is taxed at the main IHT rate of 40%. So the rate charged on the value above the nil-rate band is 40%. Remember, there are reliefs (like transfers to a spouse or to charity, or the residence nil-rate band) that can reduce the overall tax, but the standard rate on the excess over £325,000 is 40%.

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