Who pays UK Inheritance Tax?
• UK domiciles – subject to Inheritance Tax on all of their worldwide assets. • Non UK domiciles – subject to Inheritance Tax on the assets held in the United Kingdom plus special rules for Income Earned Overseas . Rates of Tax – Rates of Tax on Chargeable Lifetime Transfers: Gifts/transfers you make when alive. Value of Estate and tax rate • £0 – £325,000 – 0% tax rate • Excess over £325,000 – 20% tax rate due at time of gift or transfer • The value of the estate includes cumulative gifts and transfers made in last 7 years allowing for taper relief. Rate of Tax on Potentially Exempt Transfers (PETs) • At time of gift or transfer – no tax is due as the transfer is potentially exempt • Death within 7 years – Normal death rates may apply subject to taper relief rules • Death after 7 years – Completely free of Inheritance Tax Rates of Tax on Transfer on Death: Value of Estate and tax rate • £0 – £325,000 – 0% tax rate • Excess over £325,000 – 40% tax rate • The value of the estate include
