Inheritance Tax ‐ FAQ

Are there any other gifts which do not attract Inheritance Tax?

Yes, the most common being:

  • Lifetime gifts with a total value of no more than £3,000, in any one tax year.
  • Gifts on marriage (although the limit varies depending on your relationship to the person receiving the gift).
  • Gifts made to others in your lifetime provided you do not continue to benefit from the item gifted and you survive the period of 7 years after making the gift.
  • Gifts to charities.

If I leave all my assets to my spouse or civil partner upon my death, will they have to pay Inheritance Tax if the value is greater than the Nil-Rate Band?

No. Any gifts made to your spouse or civil partner are entirely free of Inheritance Tax.

What is Inheritance Tax?

Inheritance Tax is, subject to some exclusions, a tax payable on the value of any assets in excess of a person's tax free allowance on death. It is charged at 40%.

What is the Nil-Rate Band?

Everybody has an individual tax free allowance called their Nil-Rate Band. For the year 2012/13 this is £325,000.