|Single person’s threshold||£325,000||£325,000|
|Combined threshold limit for||£650,000||£650,000|
|Chargeable on lifetime transfers||20%||20%|
|Transfers on or within seven years of death||40%||40%|
* 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%|
- Most transfers between spouses and between civil partners.
- First £3,000 of lifetime transfers in any tax year plus any unused from the previous year.
- Gifts up to £250 p.a. to any number of persons.
- Gifts made out of income that form part of normal expenditure and do not reduce the standard of living.
- Gifts in consideration of marriage/civil partnership up to £5,000 by a parent, £2,500 by grandparents, or £1,000 by anyone else.
- Gifts to charities, whether made during lifetime or on death.
- A £175,000 transferrable allowance for residential property passed to children or grandchildren will be phased in from 2017.