How Inheritance Tax is charged — the occasions on which it arises, the rates and bands, and the lifetime rules that determine whether anything is payable at all.
An IHT liability is rarely a figure read straight off a rate table; it emerges from a structured calculation, and this chapter assembles that calculation piece by piece. It opens with the charge itself — when tax arises, the rates that apply and the standard nil rate band — then defines a transfer of value through the loss-to-donor principle and sets out the exemptions that can take a transfer out of charge entirely. From there it distinguishes potentially exempt transfers from chargeable lifetime transfers, and adds the quarter-up valuation of quoted shares and the grossing up required where the transferor bears the tax. It closes with the consequences of death within seven years — cumulation, failed PETs, recalculated CLTs and taper relief — alongside the residence nil rate band and the transferable bands that can lift a couple's combined tax-free threshold.
