Just a reminder of the current rates and reliefs. If you did not use your annual exemption of £3,000 in 2010/11 then this carries forward for one year only to add to the 2011/12 exemption of £3,000 available.
You should keep a record of your gifts with the relief available.
If you would like some further advice then please contact us.
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Rates |
2011-12 |
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| Nil rate band * |
£325,000 |
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| Rate of tax on excess on death |
40% |
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| Lifetime rates on excess |
20% |
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| Spouse exemption limit for overseas domiciled spouse/civil partner |
£55,000 |
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| Reliefs |
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| Annual exemption per donor |
£3,000 |
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| Small gifts per donee |
£250 |
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| Regular gifts out of excess income |
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| Gifts in consideration of marriage by: |
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| Parent |
£5,000 |
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| Grandparent |
£2,500 |
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| Remote ancestor |
£2,500 |
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| Party to the marriage |
£2,500 |
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| Other person |
£1,000 |
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| * Potentially increased if you are a surviving spouse or civil partner |
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Potentially exempt transfers |
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| Gifts to individuals and trusts for the disabled that are not chargeable transfers are potentially exempt transfers. No inheritance tax is payable on a potentially exempt transfer but if death occurs within 7 years, it becomes a chargeable transfer at the date of the gift and tax is calculated at the full death rates applying at the date of death after applying the available nil rate band with the excess subject to taper relief below. | |||||
| Reduced charge on gifts within seven years of death | |||||
| Years before death |
0-3 |
3-4 |
4-5 |
5-6 |
6-7 |
| % of death charge |
100 |
80 |
60 |
40 |
20 |
