Rates of Tax on Transfers

  • Transfers made on death after 5 April 2016
    • Up to £325,000 Nil
    • Excess over £325,000 40%
  • Transfers made after 5 April 2016
    • Lifetime transfers to and from certain trusts 20%

A lower rate of 36% applies where at least 10% of deceased’s net estate is left to a registered charity.

Main Exemptions

  • Transfers to:
    • UK‐domiciled spouse/civil partner No limit
    • non‐UK‐domiciled spouse/civil partner (from UK‐domiciled spouse) £325,000
    • UK‐registered charities No limit
  • Lifetime transfers
    • Annual exemption per donor £3,000
    • Small gifts exemption £250
  • Wedding/civil partnership gifts by
    • Parent £5,000
    • Grandparent £2,500
    • other person £1,000

100% relief: businesses, unlisted/AIM companies, certain farmland/building
50% relief: certain other business assets

Reduced Tax Charges on Gifts within 7 years of Death

Years before death 0‐3 3‐4 4‐5 5‐6 6‐7
Inheritance Tax payable 100% 80% 60% 40% 20%