The exemptions and reliefs that take value out of the inheritance tax net — often the difference between a substantial charge and no tax at all.
A transfer caught by the IHT charging provisions is not necessarily taxed in full, and knowing which exemptions and reliefs apply is where most of the calculation is won or lost. This chapter opens by distinguishing exemptions from reliefs and surveying the main ones, before working through the spouse, annual and small gifts exemptions, then the exemptions for normal expenditure out of income, marriage gifts and gifts to charity. It then turns to the two great value-reducing reliefs: business property relief at 100% or 50%, with its ownership period, investment-business exclusion and excepted assets rules, and agricultural property relief, including how the two interact when both could apply. It closes with the clawback rules that can strip relief from a lifetime transfer if the transferor dies within seven years.
