Introduction
Inheritance Tax (IHT) is a widely unpopular tax, but planning
ahead can limit IHT exposure.
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 or to 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
the IHT exposure of a foreign domiciliary (non-UK deemed domiciled)
is limited to UK-sited assets. The Government has proposed changes
to the rules around deemed domicile and these are expected to be
introduced from 6 April 2017. Separate briefing notes are available
on these
