|
Inheritance Tax
|
Transfers on or Within 7 Years Before
Death
|
2008/2009
|
2007/2008
|
|
Nil rate band to
|
£312,000
|
£300,000
|
|
Rate of tax on balance
|
40%
|
40%
|
|
Chargeable Lifetime Transfers
|
20%
|
20%
|
From October 2007 the nil rate band will be effectivly
transferable between husband and wife.
All
lifetime transfers not covered by exceptions and made within seven years
of death will be added back into the estate for the purpose of
calculating the tax payable at the rate of death. This may then be
reduced by taper relief
| Reduced Charge on gifts within 7 Yrs of Death |
|
|
|
|
|
| Years before death |
0-3 |
3-4 |
4-5 |
5-6 |
6-7 |
| % of death charge |
100% |
80% |
60% |
40% |
20% |
The taper relief is however only effective in cases where the total
chargeable lifetime gifts exceeds the nil rate band available at death.
Main Exceptions:
Most Transfers between husband and wife. The
first £3,000 of lifetime transfers in any tax year (husband and wife
each have own exception). Gifts of up to but not exceeding £250
pa to any number of persons. Gifts made out of income that form
part of the normal expenditure and do not reduce the standard of living.
Gifts in consideration of marriage to bride and/or groom as
follows: up to £5,000 by a parent, £2,500 by a grandparent, or £1,000
by any other person. Gifts to charities, whether made during
lifetime or on death.
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