TaxPersonal TaxINHERITANCE TAX

INHERITANCE TAX

Death rate 2000/2001 1999/2000
0%    1-234,000 pounds 1-231,000 pounds
40%  over 234,000 pounds over 231,000 pounds

Lifetime gifts
Certain lifetime gifts (eg. to discretionary trusts) taxable at half of death rates

Where gift within 7 years of death, tax of death rates becomes payable, reduced as follows and credit given on tax paid on lifetime gift:

Years   0-3  3-4 4-5 5-6 6-7
Reduction in tax    0% 20% 40% 60% 80%

Main exemptions

Spouse- Both UK domiciled (or transfer non-domiciled )  Unlimited 
Non  domiciled spouse- UK domiciled transfer or     55,0000 pounds
Annual gifts per donor  3,000 pounds
Small gifts per donee not exceeding       250.00 pounds
Marriage gifts by:   
– Parent 5,000 pounds
– Other ‘relative’   2,500 pounds
– Other 1,000 pounds
Charities and political parties Unlimited

Business and Agricultural Relief
Interest in business, farms or shares held for more then two years inqualifying unlisted companies:100%
Assets or trust property used by qualyifing company or business farmland(if let before 1.9.95), or by controlling holding in listed company:50%

Payment Date:
6 months after Death/Chargeable transfer, or for lifetime gifts made6 April to 30 Sept, due 30 April in following year.

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