Inheritance Tax
Inheritance tax (IHT) is levied on a person’s estate when they die, and certain gifts made during an individual’s lifetime.
Gifts between UK-domiciled spouses during their lifetime or on death are exempt from IHT.
In this factsheet spouse includes married couples and registered civil partners. Most gifts made more than seven years before death will escape tax. Therefore, if you plan in advance, gifts can be made tax-free and result in a substantial tax saving.
We give guidance below on some of the main opportunities for minimising the impact of the tax.
Areas included are;
Scope of the tax
Residence nil rate band
Downsizing
Charitable giving
IHT on lifetime gifts
IHT on death
Estate planning
Gifts to individuals during their lifetime
Nil rate band and seven year cumulation
Transferable nil rate band
Annual exemption
Gifts between spouses
Small gifts
Normal expenditure out of income
Family maintenance
Wedding presents
Gifts to charities
Business property relief (BPR)
Agricultural property relief (APR)
Use of trusts
Life assurance
Complexity - is your Will up to date?