inheritance 1Their property or any possessions were worth than £325,000 when they die, they are liable to pay inheritance tax. So the inheritance Tax threshhold is £325,000.

For example, if you leave behind an estate worth £600,000 the tax bill will be £110,000 (40% on £275,000 – the difference between £600,000 and £325,000).

 

Since October 2007, married couples and registered civil partners can effectively increase the threshold on their estate when the second partner dies – to as much as £650,000 in 2013-14.

  • Sometimes, even if your estate is over the threshold, you can pass on assets without having to pay Inheritance Tax.
  • Charity exemption. Any gifts you make to a ‘qualifying’ charity – during your lifetime or in your will – will be exempt from Inheritance Tax.
  • Potentially exempt transfers. If you survive for seven years after making a gift to someone, the gift is generally exempt from Inheritance Tax, no matter what the value.
  • Annual exemption.
  • Small gift exemption. You can make small gifts of up to £250 to as many individuals as you like tax-free.
  • Wedding and civil partnership gifts. Gifts to someone getting married or registering a civil partnership are exempt up to a certain amount.
  • Business, Woodland, Heritage and Farm Relief.
From To Threshold/nil rate band
06-Apr-09 05-Apr-15 £325,000
06-Apr-08 05-Apr-09 £312,000
06-Apr-07 05-Apr-08 £300,000
06-Apr-06 05-Apr-07 £285,000
06-Apr-05 05-Apr-06 £275,000
06-Apr-04 05-Apr-05 £263,000
06-Apr-03 05-Apr-04 £255,000
06-Apr-02 05-Apr-03 £250,000
06-Apr-01 05-Apr-02 £242,000
06-Apr-00 05-Apr-01 £234,000
06-Apr-99 05-Apr-00 £231,000
Interest period Interest rate (%) Interest on repayments (%) Days
29 Sept 2009 to present day 3% 0.5%
24 March 2009 to 28 Sept 2009 0% 0% 189
27 Jan 2009 to 23 March 2009 1% 1% 56
6 Jan 2009 to 26 Jan 2009 2% 2% 21
6 Nov 2008 to 5 Jan 2009 3% 3% 61
6 Jan 2008 to 5 Nov 2008 4% 4% 304
6 August 2007 to 5 Jan 2008 5% 5% 153
6 Sept 2006 to 5 August 2007 4% 4% 334
6 Sept 2005 to 5 Sept 2006 3% 3% 365
6 Sept 2004 to 5 Sept 2005 4% 4% 365
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