Farley And Partners


  2015/16 2014/15
Single person’s threshold £325,000 £325,000
Combined threshold limit for £650,000 £650,000


Tax Rates

    2015/16 2014/15
  Main rate 40% 40%
  Chargeable on lifetime transfers 20% 20%
  Transfers on or within seven years of death 40% 40%
  Reduced rate* 36% 36%


* Applies if 10% or more of net estate given to charity.

All lifetime transfers not covered by exemptions and made within 7 years of death will be added back into the estate for the purposes of calculating the tax payable. This may then be reduced as follows:

Years before death 0-3 3-4 4-5 5-6 6-7
Tax reduced by 0% 20% 40% 60% 80%


Main exemptions

  1. Most transfers between spouses and between civil partners.
  2. First £3,000 of lifetime transfers in any tax year plus any unused from the previous year.
  3. Gifts up to £250 p.a. to any number of persons.
  4. Gifts made out of income that form part of normal expenditure and do not reduce the standard of living.
  5. Gifts in consideration of marriage/civil partnership up to £5,000 by a parent, £2,500 by grandparents, or £1,000 by anyone else.
  6. Gifts to charities, whether made during lifetime or on death.
  7. A £175,000 transferrable allowance for residential property passed to children or grandchildren will be phased in from 2017.
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