Estates—inheritance tax

Introduction to IHT

For a quick guide to the basics of the inheritance tax (IHT) regime and a broad overview of UK tax rates, exemptions, basic nil rate band (NRB), residence nil rate band (RNRB), transferable NRB and RNRB, agricultural property relief (APR), business property relief (BPR), the reduced 36% tax rate for estates which include at least 10% gifts to charity, the territorial scope of IHT domicile (general, deemed and elected), restrictions on deducting loans and debt, lifetime gifts, small gifts relief, the use of trusts and compliance procedures, see Practice Note: Introductory guide to IHT.

See also Practice Note: Case study—IHT calculation on death.

The charge on death

The IHT charge on death falls under two headings:

•
the additional charge—which arises on the chargeable lifetime transfers and the potentially exempt transfers (PETs) made in the seven years before death, and
•
the estate charge—which arises on the value of all the property the deceased owns (or is deemed to own) immediately before death

The calculation and apportionment of IHT due on death can be complex, especially taking account of trust interests, chargeable

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Private Client News

Private Client weekly highlights—21 November 2024

This week’s edition of Private Client highlights includes: (1) Wigglesworth v Beetson, in which the claimant failed in an action for estoppel and adverse possession; (2) the Hansard Society to host a briefing on parliamentary process for Assisted Dying Bill; (3) Khan v Khan, which considered family property and constructive trusts; (4) analysis of the Autumn Budget announcement to bring unused pension funds and death benefits within the scope of IHT; (5) Palmer v Sans, which found that there was no transaction at an undervalue where property was already held on trust for the transferee; (6) KA v FA (The Secretary of State for the Home Department intervening), where the court recognised an overseas adoption notwithstanding failure of common law test; and (7) Kireeva v Bedzhamov, in which the Supreme Court has confirmed the application of the immovables rule to English property.

HoL committee issues call for evidence on Property (Digital Assets etc) Bill

A Special Public Bill Committee established by the House of Lords has issued a call for evidence on the Property (Digital Assets etc) Bill. The deadline for submissions is Friday 20 December 2024.

Privy Council rules BVI company shares are not immovable property (Al Thani v Al Thani)

Private Client analysis: In a decision which will come as a relief to private individuals who own shares in BVI companies, the Privy Council has decided that section 245 of the BVI’s Business Companies Act 2004 does not have the effect of re-categorising shares as immovable property for the purposes of succession. Written by Kyle Bonnell, pupil at XXIV Old Buildings.

Supreme Court confirms application of immovables rule to English property

The Supreme Court has unanimously dismissed Ms Kireeva’s (Russian bankruptcy trustee’s) appeal to overturn the Court of Appeal’s’ decision regarding matters arising out of the bankruptcy of Mr Bedzhamov. Peter Declercq and Patrick Elliot, partners at DCQ Legal (who acted for Ms Kireeva), discuss the implications of the judgment.