What is the limit on inheritance tax?
There is no upper limit on inheritance tax (IHT). Inheritance tax is a tax on the diminution in value of an individual’s estate. When an individual dies, he is deemed to make a transfer of all his assets owned, immediately before his death. IHT is only chargeable when the value of “gifts” made exceeds the limit for a particular tax year. Tax years run from 6 April to 5 April. The limit for the year ending 5 April 2006 was £275,000. The limit for the year ending 5 April 2007 is £285,000. The limit for the year ending 5 April 2008 is going to be £300,000. The limit for the year ending 5 April 2009 is going to be £312,000 and the planned limit for the year ending 5 April 2010 is £325,000. The proposed limits were mentioned at the time of the 2006 Budget. It is important to note that certain gifts do not give rise to IHT. For example, gifts to a spouse (who is resident in the UK) is exempt from IHT. Also, gifts to charities and political parties are exempt from IHT. There are other occassi
