Tax Tables
Inheritance Tax
| 2007 - 08 | |
| Nil rate band | £300,000 |
| Rate of tax on balance: | |
| Chargeable lifetime transfers | 20% |
| Transfers on, or within 7 years of death | 40% |
All lifetime transfers not covereed by exemptions and made within 7 years of death will be added back into the estate for the purpose of calculating the tax payable.
This will then be reduced:
| Years before death | Tax reduced by |
| 0 - 3 | 0% |
| 3 - 4 | 20% |
| 4 - 5 | 40% |
| 5 - 6 | 60% |
| 6 - 7 | 80% |
Main exemptions
- Most transfers between spouses
- The first £3,000 of lifetime transfers in any tax year (husband and wife each have own exemption) plus any unused balance from the previous year
- Gifts of up to but not exceeding £250 p.a. to any number of persons
- Gifts made out of income that form part of normal expenditure and do not reduce the standard of living
- Gifts in consideration of marriage to bride and/or groom of up to £5,000 by a parent, £2,500 by a grandparent, or £1,000 by another person
- Gifts to charities, whether made during lifetime or on death
