Inheritance tax threshold
2009-10 2010-11 Individual inheritance tax allowance £325,000 £325,000
As announced in Budget 2009, the individual nil-rate band will be held at £325,000 in 2010-11. This gives an effective £650,000 for married couples and civil partners. The value of estates over and above the allowance is taxed at 40 per cent. In previous Budgets it was forecast that the rates for 2010-2011 would be £350,000 for individuals or £700,000 for married couples and civil partners.
Rates
| Gross transfers on death | % |
|---|---|
| Up to cumulative chargeable transfer limit | Nil |
| Over cumulative chargeable transfer limit | 40 |
| Gross lifetime transfers | Ê |
| Up to cumulative chargeable transfer limit | Nil |
| Over cumulative chargeable transfer limit | 20 |
Exemptions and reliefs
Exemptions £ Annual £3,000 Small gift to same person £250 Marriage - by parent £5,000 - by remoter ancestor £2,500 - by a party to marriage £2,500 - by others £1,000 Spouses with separate domicile £55,000 Gifts to - charities Exempt - political parties Exempt
Taper relief
Transfers on or within seven years of death are chargeable, but the tax is tapered as follows:
No of years between gift and death % of full charge 0 - 3 100 3 - 4 80 4 - 5 60 5 - 6 40 6 - 7 20
Agricultural and business property relief – between 100 and 50 %