Your guide to UK inheritance tax and trusts 22 Residence nil-rate band The residence nil-rate band is an additional nil-rate band available to your estate if you own a property and leave this to your children (including adopted, foster or stepchildren) or grandchildren. It may also be available if you have downsized or sold your property since 8 July 2015. The amount is set by the Government and is currently £175,000 for 2020/21. Settlor Someone who makes a gift to a trust, for example the policyholder who transfers the policy into a trust for the benefit of another person. Sum assured An amount payable on death of the person whose life is assured under a life assurance policy. Taper relief Reduction applied to the amount liable to IHT, where death occurs between three and seven years after setting up a trust or gifting away your assets. Years between making a PET and dying Proportion of 40% inheritance tax payable 6 -7 20% 5-6 40% 4-5 60% 3-4 80% 0-3 100% Transferable nil-rate band The ability to use any available unused nil-rate band from the estate of a deceased spouse or civil partner up to 100% of the then current nil-rate band. Transferable residence nil-rate band The ability to use any available unused residence nil-rate band from the estate of a deceased spouse or civil partner up to 100% of the then current residence nil-rate band. Trustee(s) The person/people to whom the Settlor transfers the trust assets and who administers the trust. Trust fund All assets placed in a trust. Whole life assurance A type of life assurance without a specified expiry date, where the sum assured is paid on the death of the person whose life is assured. Will A written declaration, made by a person, providing instructions for the distribution and administration of his/her estate after his/her death.