The following Private Client guidance note provides comprehensive and up to date legal information covering:
This Practice Note is based on material originally produced by Tolley
This Practice Note outlines how to calculate the amount of inheritance tax (IHT) that arises on an individual’s estate on death. For a broader explanation of the IHT charge on death, see Practice Note: IHT—the charge on death.
The IHT charge on death falls under two headings:
the 'additional charge'—which can arise on chargeable lifetime transfers (CLT) and potentially exempt transfers (PET) made in the seven years before death, and
the 'estate charge'—which arises on the value of all the property the deceased owned (or was deemed to own) immediately before death
Additional IHT may be due on CLTs that have already suffered IHT at the lower lifetime rates.
Where the deceased has not survived seven years from the date of a PET, the failed PET is treated as a chargeable transfer and IHT arises for the first time.
The IHT due on each of the above transfers depends on:
the amount of the chargeable transfer in question, and
the total amount of the gross chargeable transfers (including failed PETs where relevant) made within the period of seven years preceding that chargeable transfer
This means that transfers made up to 14 years before death may have to be taken into account as part of
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