Introduction
Inheritance tax is a widely unpopular tax, but planning ahead
can limit your inheritance tax exposure.
Inheritance tax (IHT) is a tax on transfers of value by
individuals. It may be payable on certain lifetime transfers, on
the value of an estate at death, on certain transfers into and out
of trusts and on some transfers made by close companies. A transfer
will either be a chargeable transfer, a potentially exempt transfer
(PET) or exempt. IHT is levied on 'chargeable
transfers'.
When valuing a transfer one looks at the loss to the donor and
not the benefit to the donee.
Broadly, a UK domiciled or deemed domiciled individual is
subject to IHT on chargeable transfers of worldwide assets, while a
(non-UK deemed domiciled) foreign domiciliary's IHT exposure is
limited to UK-sited assets.
