What is the limit on inheritance tax?

Answer 1

There is no upper limit on inheritance tax (IHT). Inheritance tax is a tax on the diminution in value of an individual's estate. When an individual dies, he is deemed to make a transfer of all his assets owned, immediately before his death.
IHT is only chargeable when the value of "gifts" made exceeds the limit for a particular tax year. Tax years run from 6 April to 5 April. The limit for the year ending 5 April 2006 was £275,000. The limit for the year ending 5 April 2007 is £285,000. The limit for the year ending 5 April 2008 is going to be £300,000. The limit for the year ending 5 April 2009 is going to be £312,000 and the planned limit for the year ending 5 April 2010 is £325,000. The proposed limits were mentioned at the time of the 2006 Budget. It is important to note that certain gifts do not give rise to IHT. For example, gifts to a spouse (who is resident in the UK) is exempt from IHT. Also, gifts to charities and political parties are exempt from IHT. There are other occassions (other than death) on which IHT may be charged - e.g. on the transfer of assets into a discretionary trust), so you should always seek specific professional advice. Regards, Gavin

Answer 2

Tax Year 2005/2006 = £275,000
Tax Year 2006/2007 = £285,000

Answer 3

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