Inheritance Tax Articles

Gifts with reservation

The majority of gifts made during a person's life are not subject to tax at the time of the gift. These lifetime transfers are known as 'potentially exempt transfers' or 'PETs'. These gifts or transfers achieve their potential of becoming exempt from Inheritance Tax if the taxpayer survives for more than seven years after making the gift. There is a tapered relief available if the donor dies...

Qualifying for residence nil rate band

The Inheritance Tax residence nil rate band (RNRB) is a transferable allowance for married couples and civil partners (per person) when their main residence is passed down to a direct descendent such as children or grandchildren after their death. The allowance increased to the present maximum level of £175,000 from 6 April 2020. The allowance is available to the deceased person’s children or...

Domicile and IHT

Domicile is a general legal concept which in basic terms is taken to mean the country where you permanently belong. But actually, determining domicile status can be complex. HMRC guidance states that domicile cannot be defined precisely, but the concept rests on various basic principles. Although domicile can change, there is generally a presumption in favour of the continuation of an existing...

by James MacDonald

IHT business asset relief

There are a number of reliefs available that can reduce liability to IHT if you inherit the estate of someone who had died.

Inheritance Tax-free gifts reminder

We wanted to remind our readers of the Inheritance Tax (IHT) implications of making cash gifts during the current 2021-22 tax year that will end on 5 April 2022.

You can give away up to £3,000 worth of gifts each tax year. This is known as your

Bare or simple trusts

A trust is an obligation that binds a trustee, an individual or a company to deal with the assets such as land, money and shares which form part of the trust. The person who puts assets into a trust is known as a settlor and the trust is for the

IHT – limitations on spouse or civil partner exemptions

Inheritance Tax (IHT) is a tax that is levied on a person’s estate when they die and can also be payable during a person’s lifetime on certain trusts and gifts. The rate of Inheritance Tax payable is 40% on death and 20% on lifetime gifts.

Leaving gifts to charity in your Will

The government introduced new rules to encourage charitable giving on death in 2012. The rule which has remained unchanged ever since means that a reduced rate of Inheritance Tax (IHT) of 36% (reduced from 40%) applies where 10% or more of a

IHT and domicile

Domicile is a general legal concept which in basic terms is taken to mean the country where you permanently belong but actually determining domicile status can be complex. HMRC guidance states that domicile cannot be defined precisely, but the

IHT change of domicile

It is possible in certain circumstances for an individual to have two domiciles although this is unusual. There is a concept in the UK of deemed domicile, whereby any person who has been resident in the UK for more than 15 of the previous 20 years

Who pays Inheritance Tax?

Inheritance Tax (IHT) is commonly collected on a person’s estate when they die but can also be payable during a person’s lifetime on certain trusts and gifts. The rate of IHT currently payable is 40% on death and 20% on lifetime gifts. IHT is

Inheritance Tax Business Relief

There are a number of reliefs available that can reduce liability to IHT if you inherit the estate of someone who has died. One of these reliefs is known as Business Relief and is a valuable tax relief for taxpayers with business interests, offering

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