Inheritance tax rates
The following inheritance tax rates apply.
| Rates | 2007/2008 | 2006/2007 |
|---|---|---|
| Nil rate band | up to £300,000 | up to £285,000 |
| Chargeable at 40% | above £300,000 | above £285,000 |
A Potentially Exempt Transfer (PET) normally has IHT due if death occurs within seven years of the gift being made.
Tax is charged at 20% where tax is payable on a lifetime gift (other than those taxable only because they are made within seven years of death).
Inheritance tax relief
The following inheritance tax taper relief is available.
| Time from gift to death | Reduction in tax payable on PET |
|---|---|
| 0 to 3 years | nil |
| 3 to 4 years | 20% |
| 4 to 5 years | 40% |
| 5 to 6 years | 60% |
| 7 years or over | 100% |
This page was last reviewed on 16 May 2007. The information may not reflect changes in legislation made after this date.
This is only a guide to your tax position and should not be relied on in place of professional accounting or tax advice. Any calculated figures are illustrative and are based on the data you provided.
