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Inheritance Tax

Inheritance Tax

2015-16

2014-15

Nil rate band for individuals*

£325,000

£325,000

Thereafter – lifetime gifts**

20%

20%

– lower rate on death***

36%

36%

– on death

40%

40%

*     Unused nil rate band can be used by surviving spouse or civil partner.**   Increased to 40%, subject to tapering relief, on gifts made between 3 and 7 years pre death. Certain lifetime gifts are exempt. Special rules for business property.

*** A lower rate applies where 10% or more of the net estate is left to charity.

Years before death

0-3

3-4

4-5

5-6

6-7

% of death charge

100%

80%

60%

40%

20%

Main exempt lifetime gifts
Recurring annual gifts out of surplus income

unlimited

Annual gifts out of capital (with one year carry forward if unused)

£3,000

Small gifts (per recipient)

£250

Parental gift on marriage

£5,000

Grandparent or party to marriage

£2,500

Other gifts on marriage (per donor)

£1,000

Business Property Relief
Shares in unquoted companies (including USM/AIM stocks)

100%

Shares in quoted companies
– shareholding upto 50%

none

– shareholding over 50%

50%

Unincorporated business or interest in a business

100%

Land, buildings, plant and machinery used in the deceased’s business/company

50%