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Tax Facts

Budget 2010

Introduction

Personal Taxation

Employee Taxation

Investment Reliefs

Capital Gains Tax

Trusts

National Insurance Contributions

Tax Credits

Inheritance Tax

Business Tax

Corporation Tax

Value Added Tax

Stamp Duty

Insurance Premium Tax

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Inheritance Tax

Rates

The nil rate band for cumulative chargeable transfers in the last seven years is £325,000 (unchanged since 6 April 2009). If one of a married couple/civil partnership did not use the full band on death, the unused proportion increases the nil band of the other spouse/partner if they die on or after 9 October 2007. Gifts above that are charged at the following rates:

Chargeable legacies on death	40%
Gifts within 7 years of death	40%, with reductions if over 3 years before death
Lifetime chargeable gifts	20% if the donee pays the tax, 25% if the donor pays

Payment

Inheritance Tax (IHT) on a deceased's estate and on gifts within 7 years of death is generally payable at the end of six months after the month of death, but tax on the estate must be paid before probate is granted, and this may necessitate earlier settlement.

IHT on chargeable lifetime gifts is payable on the later of six months after the month of transfer or 30 April in the next tax year.

Major reliefs

The following transfers are exempt from IHT:

the first £3,000 gifted in a tax year (unused limit may be carried forward for one year)

small gifts of up to £250 per recipient in a year

normal expenditure out of income

gifts between husband and wife, unless the donor is domiciled in the UK and the recipient is not

gifts between individuals more than 7 years before the donor's death (while the donor survives, the gift is left out of account as 'potentially exempt')

gifts in consideration of marriage - £5,000 from a parent, £2,500 from a grandparent or a party to the marriage, £1,000 from others

Most business and agricultural property enjoys a 100% relief once it has been owned for two years, although some types of property are relieved only at 50%, and it is important to meet all the conditions.

Pre-owned assets tax

An income tax charge applies to certain arrangements which remove assets from an IHT-chargeable estate but allow the former owner to use or enjoy them.

email: info@davidcutter.co.uk
Tel: 0121-550-8525 Fax: 0121-585-7341

2 Lyttleton Court | Birmingham Street | Halesowen | West Midlands | B63 3HN

DIRECTORS:	PAUL CUTTER BA(Hons), ACA
	KATE JONES BA(Hons), FCCA, ACA

DAVID CUTTER & CO IS A TRADING NAME OF CUTTER & CO LIMITED

COMPANY NUMBER: 07252989

A MEMBER OF THE INSTITUTE OF CHARTERED ACCOUNTANTS IN ENGLAND AND WALES