When a person dies, his estate and all chargeable transfers made within seven years before his death are subject to inheritance tax at rates set out below.

Lifetime chargeable transfers are subject to inheritance tax at half the death rate, i.e 20%.There is a tapered reduction in the tax payable on transfers made between seven and three years before death.

Years before death

0 - 3

3 - 4

4 - 5

5 - 6

6 - 7

Over 7

Exemptions

Annual exemption

Small gift - annual amount per donee

- by parent

- by grandparent

- by party to the marriage or civil partnership

- by any other person

Most transfers between spouses and civil partners

Gifts to political parties

Gifts to charities