What counts as above the Inheritance Tax nil rate band?
The current Inheritance Tax nil rate band is £312,000 (tax year 2008-2009). In order to work out whether the Inheritance Tax nil rate band has been exceeded on a transfer, you need to take into account all ‘chargeable’ (non-exempt, including potentially exempt) gifts and transfers made in the previous seven years. If a transfer takes you over the nil rate band, Inheritance Tax is payable at 20 per cent on the excess.
