Inheritance Tax

Inheritance Tax is a tax on gifting within seven years of death or on death or on gifting into some trusts. In brief and subject to the details below and many legislative detailed tax provisions:-

  • Assets passing on death or by gift between spouses or civil partners are exempt to Inheritance Tax;
    Nil Rate Band (Personal Allowance) – Each person has a personal allowance of £325,000 below which Inheritance Tax is not chargeable;
  • Residential Nil Rate Band – If your estate is below £2m an additional allowance of up to £175,000 is available if you own your home which you are leaving to descendants;
  • Each spouse or civil partner is entitled to the same allowances;
  • Unused spouse or civil partners allowances pass on death to the surviving spouse or civil partner;
    Thus a couple with a home worth more than £350,000 can, on the second death, leave assets to their children worth £1m without Inheritance Tax liability;
  • Where Inheritance Tax is chargeable the rate is 40% on the excess above any allowances;
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