|
Q:
What is the nil rate band?
A:
When you die, the Inland Revenue will add up the value
of your assets. In the current tax year (2003/04),
if your assets plus chargeable gifts made in the previous
years amount to £255,000 or less, your family does
not have to pay any IHT on them. This is known as
the 'nil rate band'. If your assets exceed £255,000,
IHT at 40% is due on everything over this threshold.
Q:
What are potentially exempt transfers (PETs)?
A:
These
are gifts you make during your lifetime. They are
potentially exempt (from inheritance tax) because
if you survive for seven years after making them,
they pass outside your estate and no IHT is due.
Q:
Is IHT payable on transfers between husband and wife?
A:
No IHT is payable on assets that pass between a husband
and wife.
Q:
What are the implications of taper relief'?
A:
If you die between three and seven years of making
a gift (PET), taper relief means that your family
will not pay the full rate of IHT, if any, on the
gift. The earlier the gift is made, the less tax will
be due.
Q:
Who is the settlor?
A:
This is the person who has given something away through
a trust.
Q:
What is a gift with reservation?
A:
If you give away an asset during your lifetime, but
you can potentially benefit from the asset, it is
called a 'gift with reservation'. This applies to
any asset you continue to benefit from, or that you
can ask to be returned if necessary.
For
further information about how we could help you, please
e-mail or call us.
article
dated 05/2003
|
