Park McKillop & Company - Inheritance tax

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Inheritance tax

 

 2012/132013/14
Standard threshold£325,000£325,000
Combined threshold maximum for married couples and civil partners£650,000£650,000
Rate of tax on balance:  
    Chargeable lifetime transfers
    Transfers on, or within 7 years of, death
20%
*40%
20%
*40%
* A lower rate of 36% applies where 10% or more of a deceased person's net estate is left to charity

 

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. Tax attributable to such transfers is then subject to Taper Relief:

Years before death0-33-44-55-66-7
Tax reduced by0%20%40%60%80%

 

Main Reliefs
Business property:
- business or interest therein100%
- qualifying shareholdings in unquoted* companies100%
- land, buildings, machinery, or plant used by transferor's controlled company or partnership50%
Agricultural property50% or 100%
*Unquoted companies include those listed on AIM


Main Exemptions

  1. Most transfers between spouses and civil partners.
  2. The first £3,000 of lifetime transfers in any tax year plus any unused balance from previous year.
  3. Gifts of up to but not exceeding £250 p.a. to any number of persons.
  4. Gifts in consideration of marriage or civil partnership of: up to £5,000 by a parent, up to £2,500 by a grandparent or great grandparent, or up to £1,000 by any other person.
  5. Gifts made out of income that form part of normal expenditure and do not reduce the standard of living.
  6. Gifts to charities, whether made during lifetime or on death.


Chartered Accountants Registered Auditors

Registered as auditors by the Association of Chartered Certified Accountants and regulated
for a range of investment business activities by the Institute of Chartered Accountants in Ireland

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