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Tax Rates |
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Inheritance Tax |
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The following inheritance tax rates apply.
| Rates |
2005/2006 |
2004/2005 |
| Nil rate band |
up to £275,000 |
up to £263,000 |
| Chargeable at 40% |
above £275,000 |
above £263,000 |
A Potentially Exempt Transfer (PET) normally has IHT due if death occurs
within seven years of the gift being made.
Tax is charged at 20% where tax is payable on a lifetime gift (other than
those taxable only because they are made within seven years of death).
Inheritance tax relief
The following inheritance tax taper relief is available.
| Time from gift to death |
Reduction in tax payable on PET |
| 0 to 3 years |
nil |
| 3 to 4 years |
20% |
| 4 to 5 years |
40% |
| 5 to 6 years |
60% |
| 7 years or over |
100% |
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