What are my Allowances?
Your Personal Allowance
Each person currently has, on death, an allowance of £325,000 called the nil rate band (and £175,000 allowance called the residence nil rate band) which includes: properties, personal effects, cars, savings, investments and insurance, collectively known as your Estate. For widows/widowers and bereaved civil partners this may be increased to as much as 2 x £500,000 = £1,000,000.
Spouse Exemption
It is important to note that there is no Inheritance Tax on transfers (gifts), whatever the value, between married couples or civil partners.
Annual Exemption
There is no limit to the size of gifts that may be made, but if having made a gift you die within seven years, the value of the gift falls into tax. (The seven year rule and tapered relief is detailed on page 59 of the free brochure below)
The exemption from this is that everyone can give away up to £3,000 per tax year, say, to one child or shared between other children. For a couple this means that £6,000 may be given away each year without fear of the gift falling into tax post death.
