Why Wait For Free Advice Call Now 02082961799

Inheritance Tax

Liability to inheritance tax (IHT) may arise when a person dies or on certain lifetime gifts which are not exempt or potentially exempt.

Individuals domiciled in the UK may be subject to IHT on their worldwide assets.
Non-UK domiciled individuals are generally only subject to IHT on their UK assets.
Individuals who have been resident in the UK in 17 out of the previous 20 years are treated as UK domiciled for IHT purposes.

Inheritance Tax Husbands and wives are taxed separately; however, there is no IHT on transfers between spouses, provided the recipient is domiciled in the UK.

IHT is charged at a rate of 40% on death and at a rate of 20% on certain lifetime transfers. The first £275,000 is charged at a nil rate.

Where a donor of a lifetime gift dies within seven years of making the gift, IHT may be due on the gift. The full rate if tax is reduced depending on the interval between the gift and the date of death. If the gift, plus chargeable transfers in the previous seven years, is less than £275,000 it is within the nil rate band and the reduction does not apply.

Period of years before death	% of full rate taxes
Not more than 3	100
More than 3 but not more than 4	80
More than 4 but not more than 5	60
More than 5 but not more than 6	40
More than 6 but not more than 7	20

Annual exempt gifts: £3,000.00 per donor and £250.00 per donee.

For more information. | Return to the Product Page | Mitigating Inheritance Tax

Top of the page

MLP (Mortgage Life and Pensions

Inheritance Tax