Inheritance tax touches almost every private client and many business clients a solicitor will advise. It bites when wealth moves — whether someone gives assets away during their life, puts them into a trust, or leaves them on death. Your job in practice is to recognise when a charge arises, calculate it accurately, and use the reliefs and exemptions that lawfully reduce it. Get this right and you protect families and businesses from avoidable tax; get it wrong and the cost falls on your client.
This lesson builds your understanding in a logical order:
- Nature, Scope and Categories of Transfer — what IHT taxes, the transfer of value, and how lifetime gifts split into exempt transfers, PETs and CLTs.
- Rates, Nil Rate Band and Lifetime Charges — the 0% threshold, the 20% and 40% rates, cumulation, and what happens when a transferor dies within seven years.
- Trust Charges and Gifts with Reservation — the ten-year anniversary charge and gifts you give away but keep enjoying.
- Exemptions — spouse, charity, annual and other exemptions that reduce or remove the charge.
- Business and Agricultural Property Relief — when trading businesses and farmland qualify, and at what rate.
- Death Estate, Nil Rate Bands and Taper Relief — calculating tax on death, transferable and residence bands, and taper relief.
- Payment and Liability — who pays, by when, and when instalments are available.