CHRISTMAS OFFER Subscribe to Hertfordshire Life today CLICK HERE

Finance: Inheritance tax in 10 numbers

PUBLISHED: 18:24 26 July 2016 | UPDATED: 18:24 26 July 2016

Knowing the tax boundaries will help redistribute your wealth to the maximum (Photo: Thinkstock)

Knowing the tax boundaries will help redistribute your wealth to the maximum (Photo: Thinkstock)

Archant

As the saying goes, death and taxes are life’s inevitables. So when the two combine it’s time for a good plan. Nic Kamintzis of St Albans-based financial planners KDW, outlines 10 key numbers we should all know

At KDW our clients often ask us about inheritance tax, they all want to make sure that their loved ones receive as much of their hard earned savings as possible. To give an insight into how inheritance tax works we would like to share 10 key numbers that you should be aware of.

0 per cent

Inheritance tax is not applied to any money or assets donated to charities, museums, universities or community amateur sports clubs.

7 per cent

If a person gifts a substantial amount of money or valuable assets and then dies within seven years, HMRC will include the gifts in the £325,000 tax threshold. The rate at which inheritance tax applies is reduced depending on the number of years since the money or asset was given in the following ratio of years to tax:

Less than three: 40 per cent

Three to four: 32 per cent

Four to five: 24 per cent

Five to six: 16 per cent

Six to seven: 8 per cent

10 per cent

If 10 per cent or more of the net value of an estate is left to charity then inheritance tax can be paid at a reduced rate of 36 per cent.

40 per cent

If your estate is worth over £325,000, then anything over that amount will be subject to a rate of 40 per cent inheritance tax.

£250

Inheritance tax is not applicable on individual gifts worth up to £250. However, if you give an individual more than £250 the whole amount counts, not just the money after the first £250.

£2,500

If a grandchild gets married you can gift them or their new spouse a lump sum up to the value of £2,500, free of inheritance tax.

£3,000

There is an annual exemption of £3,000, which means an estate does not pay inheritance tax on any gifts up to £3,000 that are given away by the deceased in each tax year. If no money or assets are gifted in one tax year then it can be carried into the next tax year, however the maximum exemption is £6,000.

£5,000

You are able to gift your children or their new spouse a lump sum up to the value of £5,000 when they get married, free of inheritance tax.

£325,000

Everyone is entitled to pass on up to £325,000 of their estate (property, money and possessions) tax free. This is known as the nil rate band.

£650,000

Married couples and registered civil partnerships have the allowance doubled, so the nil rate band is £650,000.

For more information and queries on inheritance tax planning, contact Nic Kamintzis at nic@kdw.co.uk or 01727 852299.

0 comments

Welcome , please leave your message below.

Optional - JPG files only
Optional - MP3 files only
Optional - 3GP, AVI, MOV, MPG or WMV files
Comments

Please log in to leave a comment and share your views with other Hertfordshire visitors.

We enable people to post comments with the aim of encouraging open debate.

Only people who register and sign up to our terms and conditions can post comments. These terms and conditions explain our house rules and legal guidelines.

Comments are not edited by Hertfordshire staff prior to publication but may be automatically filtered.

If you have a complaint about a comment please contact us by clicking on the Report This Comment button next to the comment.

Not a member yet?

Register to create your own unique Hertfordshire account for free.

Signing up is free, quick and easy and offers you the chance to add comments, personalise the site with local information picked just for you, and more.

Sign up now

More from Hertfordshire Life

Friday, November 16, 2018

Inspired by steampunk and Photoshop, amateur photographer Gary Nicholls embarked on an epic challenge to create a trilogy of lavish photo novels

Read more
November 2018
Friday, November 16, 2018

250 years ago this month a baron’s servant smashed down a bedroom door in St Albans’ White Hart Inn to find a prince in bed with his master’s wife. Cue a court case, a delighted press, and much airing of royal underwear

Read more
November 2018
Friday, November 16, 2018

Christmas isn’t complete without a trip to a festive fair. From German-style food stalls to vintage fetes, Hertfordshire’s Christmas markets have it all

Read more
Thursday, November 15, 2018

Don’t miss the December issue – everything you need for a fabulous Herts Christmas!

Read more
Wednesday, November 7, 2018

Indulge in the very best of pub classics every Wednesday night at The Black Horse.

Read more
Friday, November 2, 2018

It’s that time of year again and we have our special T-BONE steak offer!

Read more
Wednesday, October 31, 2018

From Hertford to Flanders, a young army chaplain kept a vivid record of his experiences in the First World War. Sarah Reay tells her grandfather’s remarkable story

Read more
November 2018
Wednesday, October 31, 2018

This year marks the 100th anniversary of the end of the First World War, so we’ve gathered some Remembrance Day events taking place in the county

Read more
November 2018
Wednesday, October 31, 2018

If you’re looking for things to do in Hertfordshire this month, we have gathered lots of events for November 2018

Read more
Wednesday, October 31, 2018

We quiz author Kevin Exley about his new book that takes the reader on the trail of fascinating stories, new and old, around Berkhamsted

Read more
October 2018

Newsletter Sign Up

Sign up to the following newsletters:

Sign up to receive our regular email newsletter

Our Privacy Policy


Topics of Interest

Food and Drink Directory

Local Business Directory

Search For a Car In Your Area

Property Search