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

Which of the following statements about the inheritance tax death rate and the residence nil rate band is correct for a death in the 2026/27 tax year?

The death rate is 40% and the residence nil rate band is £175,000. The 20% rate applies only to chargeable lifetime transfers, and £325,000 is the standard nil rate band, not the residence band.

  1. AThe death rate is 20% and the residence nil rate band is £175,000
  2. BThe death rate is 40% and the residence nil rate band is £175,000Correct
  3. CThe death rate is 40% and the residence nil rate band is £325,000
  4. DThe death rate is 20% and the residence nil rate band is £325,000

Explanation

The tax tables give a nil rate band of £325,000, a residence nil rate band of £175,000, a lifetime rate of 20% and a death rate of 40%. Option three confuses the two bands, and the 20% options use the lifetime rate.

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