What are tax-free transfers for Inheritance Tax purposes
There are many reliefs for IHT purposes. They include:
- Business Property Relief – 100% relief for business assets including an interest in a business, a controlling interest comprising unquoted shares including AIM listed shares, and unlisted shares in a private company.
- Agricultural Property Relief – 100% relief (occasionally 50%)
- A controlling interest in a listed company – 50% relief.
- Certain personal assets used in a business – 50% relief.
Additionally, there are other, smaller reliefs that can be claimed:
- An annual exemption of £3,000. An unused allowance can be carried forward for one year.
- Small gifts exemption of £250 per person.
- Gifts on a marriage or civil partnership: £5,000 from a parent, £2,500 from a grandparent, £1,000 others
There is also an exemption for annual gifts made from income. Basically, a gift will not count as a gift for IHT purposes, if you can demonstrate that the donor’s annual income is at a level to make the gifts without affecting their ability to cover their usual monthly costs.
Gifts to an individual within the nil rate band, and with no strings attached, may still be made without any charge to IHT if the donor lives for 7 years after making the gift.
Changes to the taxation of trusts and non-domiciled persons have complicated IHT planning in recent years. If you haven’t considered your options recently we recommend a review. All you need to do is compile a list of your assets, let us have sight of your Will(s) and we can consider changes you might make to reduce your exposure to this tax.
Latest News
- Why every business owner needs an exit plan - July 1, 2025
- How global unrest could impact the UK economy and your business - June 26, 2025
- Winter Fuel Payments reinstated for over 9 million pensioners - June 24, 2025
- How artificial intelligence is changing accountancy - June 19, 2025
- New identity verification rules at Companies House - June 17, 2025
- Hospitality sector to benefit from savings - June 12, 2025
- When can you reduce your July 2025 Self-Assessment payment? - June 11, 2025
- Statutory Sick Pay reform- a growing concern for small businesses - June 5, 2025