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Budget 2008
Inheritance Tax
Cumulative transfers on death
| After 5 April 2008 | During 2007/2008 | Rate |
| £ | £ | % |
| 1-312,000* | 1-300,000* | nil |
| over 312,000 | over 300,000 | 40 |
Transfers within seven years of death |
% of charge at death |
| 0-3 | 100 |
| 3-4 | 80 |
| 4-5 | 60 |
| 5-6 | 40 |
| 6-7 | 20 |
Other chargeable lifetime transfers
50% of death rate.
| Main exemptions and reliefs | |
| £ | |
| Annual gifts per donor† | 3,000 |
| Small gifts per donee per annum | 250 |
| Gifts in consideration of marriage/civil partnership | |
| - parent | 5,000 |
| - grandparent or other direct lineal ancestor | 2,500 |
| - between the parties to the marriage/civil partnership | 2,500 |
| - other | 1,000 |
| Transfers between spouses/civil partners | exempt‡ |
| Normal expenditure out of income | exempt§ |
| Gifts to charities, political parties, for national purposes | exempt§ |
* On death of surviving spouse or civil partner post 8 October 2007, may be
increased by the additional percentage of nil-rate band unused on earlier death of spouse or civil partner. Special rules apply where the deceased has more than one former spouse or civil partner.
† May be carried forward 1 tax year and used only after subsequent year exemption applied.
‡ Restricted to £55,000 where the transferor but not the transferee is domiciled in the UK.
§ Detailed conditions apply.
Business property relief*
- Relief available in respect of transfers during lifetime and on death†.
- 100%relief available in respect of the gifting of:
- unquoted shares in a trading company
- securities in an unquoted trading company controlled by the transferor
- quoted shares or securities in a trading company controlled by the transferor
- a business or an interest therein.
- 50%relief available in respect of land, buildings, plant or machinery
used by the transferor’s trading company or a trading partnership in
which he is a partner. - Two year minimum holding period required‡
Agricultural property relief*
- Relief available in respect of transfers during lifetime and on death†.
- 100%relief available in respect of the gifting of agricultural land with vacant possession or subject to an agricultural tenancy taken out after 1 September 1995.
- 50%relief available in respect of other interests in land.
- To qualify for relief land must be occupied for at least 2 years or owned for at least 7 years‡.
* Complex rules apply.
† Asset (or replacement asset if certain conditions are met) must still be held on
death of donor, if within 7 years of a lifetime gift, for relief to be available.
‡ Replacement asset rules may apply.
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