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RATES, BANDS AND EXEMPTIONS
No major changes were announced but changes may be introduced in Budget 2016.
If no changes are announced rates and exemptions will be as follows:
Transfers on or within 7 years before death
2016/17
2015/16
Standard exemption
£325,000
£325,000
Combined threshold maximum for married couples and civil partners
£650,000
£650,000
Rate of tax on balance
40%
40%
Chargeable lifetime transfers
20%
20%
Reduced rate
36%
36%
INHERITANCE TAX AND
UNDRAWN PENSION FUNDS IN
DRAWDOWN PENSIONS
The government will legislate to ensure
a charge to inheritance tax (IHT) will not
arise when a pension scheme member
designates funds for drawdown but does
not draw all of the funds before death. This
will be backdated to apply to deaths on or
after 6 April 2011.
DEEDS OF VARIATION
Following the review announced at Budget
2015, the government will not introduce
new restrictions on how deeds of variation
can be used for tax purposes but will
continue to monitor their use.
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Inheritance Tax
INHERITANCE TAX
TAX ADVANTAGES DURING
THE ADMINISTRATION OF
AN ESTATE
The government will legislate to allow
the ISA savings of a deceased person to
continue to bene"t from tax advantages
during the administration of their estate.
EXEMPTION FOR
COMPENSATION AND
EX-GRATIA PAYMENTS
The government will legislate Extra
Statutory Concession F20, which gives
an IHT exemption in respect of certain
compensation and ex-gratia payments for
World War II claims.
The legislation will include payments made
under a recently created compensation
scheme known as the Child Survivor Fund.
The legislation will apply to deaths on or
after 1 January 2015.
Contact us to talk
about inheritance tax