Inheritance tax is charged on the value of an estate passing on death (other than to a spouse or charity) or on a lifetime transfer where the total of the chargeable estate or transfer exceeds the stipulated minimum value, currently £300,000.

From April 2008, if a partner to a marriage/partnership dies and does not fully utilise the available exempt amount, the balance becomes available on the death of the survivor, so that a married couple/partnership will now be able to pass up to £600,000 to beneficiaries without a charge to Inheritance Tax arising.

Total gifts made in any tax year up to £3,000 are exempt from charge, and this figure increases to up to £6,000 if full advantage has not been taken of the exemption in the previous year. Each party to a marriage has their own individual exemption for this purpose.

Gifts in excess of £3,000 are potentially liable to inheritance tax but no tax is charged if the donor survives for seven years. If clients are considering reducing the value of an estate it could be advisable to make gifts in excess of the exemption limit in the knowledge that survival for seven years would effectively transfer the amount of the gift free of tax.

Small gifts of up to £250 per transferee are exempt from inheritance tax

Regular gifts out of income are also exempt.

The value of unincorporated businesses (trades or professions), or shares in any unquoted trading company qualify for 100% business property relief for inheritance tax purposes.

Shares giving control of a quoted company or assets used in a business qualify for a 50% discount for inheritance tax purposes.

We hope you find the above of interest and as indicated earlier, will be pleased to advise you further on any specific points.