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ACCA Applied Skills · Taxation (UK) · The liabilities arising on chargeable lifetime transfers and on the death of an individual

Carl died on 20 November 2025. His estate, after exemptions and reliefs but before the nil rate band, was £825,000, and no residence nil rate band is available. He made no lifetime transfers. Using the nil rate band of £325,000, what death IHT is payable on the estate and by when is it due?

The death IHT is £200,000, being 40% of £500,000 (£825,000 less the £325,000 nil rate band). It is due by 31 May 2026, six months after the end of November 2025, the month of death.

  1. A£200,000, due 31 May 2026Correct
  2. B£200,000, due 30 June 2026
  3. C£330,000, due 31 May 2026
  4. D£100,000, due 31 May 2026

Explanation

Taxable amount above the nil rate band is £825,000 less £325,000, which is £500,000. At the death rate of 40% the tax is £200,000. Death IHT is due six months after the end of the month of death, so by 31 May 2026. £330,000 would come from taxing the estate without using the nil rate band at 40%. £100,000 would result from using the 20% lifetime rate.

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