TaxPersonal TaxInheritance tax (IHT)

Inheritance tax (IHT)

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 at death rates becomes payable, reduced as follows and credit given for 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 transferor non domiciled)  unlimited
Non domiciled spouse – UK domiciled transferor  55,000 pounds
Annual gifts per donor 3,000 pounds
Small gifts per donee not exceeding  250 pounds
Marriage gifts by   – parent
– other relative
– other
 5,000 pds
 2,000 pds
 1,000 pds
Charities and Political Parties  unlimited

Business and Agricultural Relief
Interest in a business, farms or shares held for more than 2 years in qualifying unlisted companies: 100%

Assets or trust property used by qualifying company or business, farmland (if let before 1.9.95), or controlling holding in listed company: 50%

Payment date – 6 months after death/chargeable transfer, or for lifetime gifts made 6 April to 30 Sept, due 30 April in following year.

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