Rates & Allowances - 2007 / 2008
Inheritance Tax
|
Transfers on or Within Seven Years Before Death |
|
|
2007/08 |
2006/07 |
|
Nil rate
band to |
£300,000 |
£285,000 |
|
Rate of tax
on balance |
40% |
40% |
|
Chargeable
lifetime transfers |
20% |
20% |
|
All lifetime transfers not covered
by exemptions and made within seven years of death will be added back into the estate for the purpose of calculating the tax
payable. This may then be reduced by taper relief.
|
Charge on Gifts Within 7 Years of Death |
|
Years before
death |
0-3 |
3-4 |
4-5 |
5-6 |
6-7 |
|
Tax reduced
by |
0% |
20% |
40% |
60% |
80% |
|
|
Main Reliefs |
|
Business
property: |
|
- business
or interest therein |
100% |
|
- qualifying
shareholders in unquoted* companies |
100% |
|
- land, buildings,
machinery, or plant used by transferor's controlled company or partnership |
50% |
|
Agricultural
property |
50% or 100% |
|
*Unquoted companies include those listed on AIM |
|
Main Exemptions
Most
transfers between spouses and civil partners.
The
first £3,000 of lifetime transfers in any tax year plus any unused balance from previous year.
Gifts
of up to but not exceeding £250 per year to any number of persons.
Gifts
in consideration of marriage or civil partnership of: up to £5,000 by a parent, up to £2,500 by a grandparent, or up to £1,000
by any other person.
Gifts
made out of income that form part of normal expenditure and do not reduce the standard of living.
Gifts to charities, whether made during lifetime or on death.
