In the United Kingdom

United Kingdom

The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...

, Inheritance Tax

Inheritance tax

An inheritance tax or estate tax is a levy paid by a person who inherits money or property or a tax on the estate of a person who has died...

is a transfer tax

Transfer tax

A transfer tax is a tax on the passing of title to property from one person to another.In a narrow legal sense, a transfer tax is essentially a transaction fee imposed on the transfer of title to property. This kind of tax is typically imposed where there is a legal requirement for registration of...

. It was introduced with effect from 18 March 1986 replacing Capital Transfer Tax.
From 1796, inheritance

Inheritance

Inheritance is the practice of passing on property, titles, debts, rights and obligations upon the death of an individual. It has long played an important role in human societies...

taxes, then called legacy, succession and estate duties

Succession duty

Succession duty, in the English fiscal system, "a tax placed on the gratuitous acquisition of property which passes on the death of any person, by means of a transfer from one person to another person ." In order properly to understand the present state of the English law it is necessary to...

 were collected, in England and Wales

England and Wales

England and Wales is a jurisdiction within the United Kingdom. It consists of England and Wales, two of the four countries of the United Kingdom...

 on estates over a certain value. The value changed over time and the scope of estate duty was extended. By 1857 estates worth over £20 were taxable but duty was rarely collected on estates valued under £1,500. Death duties were introduced in 1894, and for the next century were effective in breaking up large estates.

In 2007, 94% of all estates escaped Inheritance Tax, mainly because they fell in the nil rate band

Nil rate band

The nil-rate band is the value of an estate that is not subject to Inheritance Tax in the United Kingdom.In the 2009/10 tax year , the nil-rate band is £325,000....

.

Estate duty was replaced in 1975 by Capital Transfer Tax, which was renamed Inheritance Tax (IHT) in 1986.