How inheritance tax catches transfers of value made in lifetime and on death, and how the nil rate band, exemptions and reliefs shape the final bill.
The whole subject turns on the seven-year window: a gift made today may resurface as a tax charge years later, so lifetime planning and the death estate cannot be understood apart. This chapter begins with the concept of a transfer of value and the three categories of lifetime transfer, then sets out the nil rate band, the lifetime and death rates, and when a chargeable lifetime transfer triggers tax immediately or on death within seven years. It moves through the ten-year anniversary charge on discretionary trusts and gifts with reservation of benefit, before working through the exemptions — spouse, charity and annual — and the generous reliefs for business and agricultural property. Finally it brings everything together in the death estate calculation, including the transferable and residence nil rate bands and taper relief, and closes with who must pay the tax, by when, and on which assets the instalment option is available.
