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.
|
