Inheritance Tax IHT Rates and Allowances
Inheritance Tax IHT Rates and Allowances: 2009/2010 and 2010/2011 - Threshold Frozen
Payable on transfer of assets whether transfer is made in life or death
* With effect 8 October 2007 on the 'second' death, i.e. the death of a surviving spouse or civil partner whose partner has already passed, any additional % of the nil rate tax band unused on the 1st partner's death can be carried forward to second death. For example, a husband and wife who do not use their Nil rate band allowance on first death will have two allowances on second deathWho pays UK Inheritance Tax?
- UK domiciles - subject to Inheritance Tax on all of their worldwide assets.
- Non UK domiciles - subject to Inheritance Tax on the assets held in the United Kingdom plus special rules for Income Earned Overseas .
Rates of Tax - Rates of Tax on Chargeable Lifetime Transfers: Gifts/transfers you make when alive. Value of Estate and tax rate
- £0 - £325,000 - 0% tax rate
- Excess over £325,000 - 20% tax rate due at time of gift or transfer
- The value of the estate includes cumulative gifts and transfers made in last 7 years allowing for taper relief.
Rate of Tax on Potentially Exempt Transfers (PETs)
- At time of gift or transfer - no tax is due as the transfer is potentially exempt
- Death within 7 years - Normal death rates may apply subject to taper relief rules
- Death after 7 years - Completely free of Inheritance Tax
Rates of Tax on Transfer on Death: Value of Estate and tax rate
- £0 - £325,000 - 0% tax rate
- Excess over £325,000 - 40% tax rate
- The value of the estate includes cumulative gifts and transfer made in last 7 years allowing for taper relief.
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