Chargeable lifetime transfers for inheritance tax

Lifetime gifts that are not exempt (for example, gifts to spouse or charities) and are not “potentially exempt” (gifts made to an individual where the giver survives for at least 7 years) are subject to inheritance tax at the lifetime rate of 0% on the first £325,000 and 20% thereafter.

The amount of the gift is the amount by which the giver’s estate has reduced because of the gift (which may not be the same as the value of the gift that has been made).

Robin John is a chartered accountant and chartered tax advised and a director of Wellden Turnbull. The above is for guidance only and may not be relied upon without taking further advice.