inheritance tax

(redirected from IHT)
Also found in: Dictionary, Thesaurus, Financial, Acronyms, Encyclopedia, Wikipedia.

inheritance tax

broadly, a tax on wealth transfers i.e. gifts made in lifetime or on death. The main charge is on everything beneficially owned at death, including property in which the deceased had an INTEREST IN POSSESSION. To prevent deathbed gifts being used to avoid the tax, gifts made within seven years of death are also charged but are POTENTIALLY EXEMPT TRANSFERs (PET) in the meantime. However, some lifetime gifts are immediately chargeable if the assets are transferred into certain types of discretionary trust. Whilst within such trusts and on exiting them, the assets are liable to a special regime of inheritance tax. The territorial scope of the tax is determined by the domicile of the individual. Those who are domiciled in the UK are chargeable on their worldwide assets and those who are not on assets situated in the UK. The value chargeable may be reduced by AGRICULTURAL PROPERTY RELIEF or BUSINESS PROPERTY RELIEF. Exemptions can apply for small gifts, maintenance payments, wedding gifts, gifts to charities and national museums and certain other bodies. Some of these exemptions have monetary limits. There is a taxable threshold below which the rate is zero. Earlier gifts obtain the benefit of this threshold before later gifts. In determining the tax on the assets held at death, a deduction is allowed for funeral expenses and debts outstanding, including any unpaid taxes. The primary responsibility for paying the tax relating to a lifetime gift which has become chargeable falls upon the recipient. Tax payable on the estate of the deceased is primarily payable by the executors, except to the extent of any tax relating to property held in a trust in which the deceased had an interest in possession, which is payable from the assets of that trust. It is possible to vary an inheritance after the death if all the beneficiaries who would inherit less as a result of the change so agree. This can result in significant reductions in the inheritance tax liability. However, the variation must be made within two years of the death and the instrument of variation must state that it is to take effect for inheritance tax purposes. Any inheritance tax is calculated as if the variation was effectively backdated to the date of death. A similar provision can be applied for CAPITAL GAINS TAX.
References in periodicals archive ?
Luckily, there are good strategies available for dealing with IHT, which means that although it sounds nasty in practice it should not be a disincentive for investing into UK residential property.
Effecting life insurance is another way to deal with IHT bills.
IHT will impart e-commerce training to BISP beneficiaries to increase market access.
Being non-resident certainly does NOT imply non-domicile and it is your domicile that determines where you pay IHT and not your residency.
IHT currently has 28 advisors in its network, while the US Wealth Management network consists of 30 advisors.
After two years, the shares should qualify for BPR and be fully exempt from IHT. It said, crucially, investors retain ownership of their assets and can withdraw them at any time, with three months' notice.
He says there is also the option of investing in assets which qualify for Business Property Relief, such as shareholdings listed on the Alternative Investment Market, which will be exempt from IHT if they are held two years immediately before death.
Stephen Dunbar-Johnson, publisher of the IHT, said: "Dubai has recaptured the dynamism that existed prior to the financial crisis, and served as the perfect destination to launch our first IHT Conversation session.
Stephen Dunbar-Johnson, publisher of the IHT, said: "We are excited to be holding this conference in the European Capital of Sport 2012.
* She can make gifts of up to pounds 3,000 per year and this amount is outside IHT. This allowance is per donor, not per recipient, so if she just gifts to you and your sister that would be pounds 3,000 in total.
Four hundred and seven patients were admitted; 71% of admissions were inter-hospital transfers (IHT) and 29% direct from scene (DIR).