Inheritance Tax
| |
2008/09 |
2007/08 |
| Standard
threshold |
£312,000 |
£300,000 |
| Combined
threshold maximum for married couples and civil partners |
£624,000 |
£600,000 |
| Rate of tax on
balance: |
|
|
Chargeable lifetime transfers
Transfers on, or within 7 years of, death |
20%
40% |
20%
40% |
|
All lifetime transfers not covered by exemptions and made within seven years
of death will be added back into the estate for the purpose of calculating the
tax payable. Tax attributable to such transfers is then reduced:
| Years before
death |
0-3 |
3-4 |
4-5 |
5-6 |
6-7 |
| Tax reduced
by |
0% |
20% |
40% |
60% |
80% |
|
| Main Reliefs |
|
Business property: |
| - business
or interest therein |
100% |
| - qualifying
shareholdings in unquoted* companies |
100% |
| - land,
buildings, machinery, or plant used by transferor's
controlled company or partnership |
50% |
| Agricultural
property |
50% or
100% |
| *Unquoted
companies include those listed on AIM |
|
Main Exemptions
- Most transfers between spouses and civil partners.
- The first £3,000 of lifetime transfers in any tax year plus any unused
balance from previous year.
- Gifts of up to but not exceeding £250p.a to any number of persons.
- Gifts in consideration of marriage or civil partnership of: up to £5,000
by a parent, up to £2,500 by a grandparent, or up to £1,000 by any other
person.
- Gifts made out of income that form part of normal expenditure and do not
reduce the standard of living.
- Gifts to charities, whether made during lifetime or on death.
|
