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Outright gifts in any tax year up to a total of £250 each to any number of people, but only if the total of all gifts made by you to the recipient in the same tax year does not exceed £250. It should also be noted that you can make gifts under more than one of the above headings to the same person and they will be free from inheritance tax. For example, to a child in the year they marry, you could give £5,000 as a wedding gift plus £3,000 as another gift, and these would all be exempt. Any amount of money at any time to any UK registered charity are completely free of any inheritance tax. Reliefs You will also need to know that there is also something known as relief of inheritance tax in some circumstances. This basically means if applicable inheritance tax is not charged on some of the individuals estate. Two of the main reliefs available are Business Property relief and Agricultural Property Relief. The information below is courtesy of the inland revenue web site. Agricultural Property Relief Agricultural property relief is available if the transfer is attributable to the agricultural value of property, owner-occupied or let. Relief is only due if the transferor has owned the property and it has been occupied for agricultural purposes for a minimum period. The relief operates the same as business property relief; by reducing the value transferred by a transfer of qualifying agricultural property. Relief is available for transfers in life, on death, and when agricultural property is chargeable as settled property. Relief is not normally available if the 'agricultural property' is subject to a binding contract for sale at the time of the transfer. For the purpose of the relief, agricultural property must be in the UK, Channel Islands or the Isle of Man. The term means agricultural land or pasture, but it also includes any farmhouses, cottages or buildings, which are of a character appropriate to the property i.e. are proportionate in size and nature to the requirements of the farming activities conducted on the agricultural land or pasture in question woodlands and buildings used for intensive rearing of livestock (or fish), if those woodlands or buildings are occupied with agricultural land or pasture and the occupation is ancillary to that of the agricultural land or pasture (where woodlands are agricultural property, however, they are not eligible for the Woodlands Relief) growing crops, when transferred with the land, stud farms engaged in the breeding and rearing of horses and to land used for grazing associated with those activities, land and buildings used in the cultivation of short rotation coppice (SRC), for transfers on or after 6 April 1995, any land within a habitat scheme as defined by s.124C(2) IHTA 1984, for transfers on or after 26 November 1996. Business property relief Relief is available for transfers of certain categories of business and of business assets if they qualify as 'relevant business property' and the transferor has owned them for a minimum period. The relief is available for transfers in life and on death. It is also available when relevant business property is chargeable as settled property. The relief reduces the value transferred by a transfer of relevant business property. Relevant business property and rate of relief Transfers of property may qualify for relief. 100% relief is available for A business or an interest in a business (such as, a partner) Shares under s.184 FA 1996, which are - not listed on a recognised Stock Exchange (unquoted shares) - traded in the Unlisted Securities Market (USM shares) or the Alternative Investment Market (AIM shares) Securities owned by the transferor, which are not listed on a recognised Stock Exchange, which themselves or with other unquoted shares or securities give the transferor 'control' of the company. Relief is also available at 100% where the transfer combines the transferor's business and qualifying settled property used in that business. 50% relief is available for A holding of shares or securities owned by the transferor, which are fully listed on a recognised Stock Exchange, which themselves or with other listed shares or securities give control of a company. Land, buildings, plant or machinery owned by a partner or controlling shareholder and used wholly or mainly in the business of the partnership or company immediately before the transfer (This applies only if the partnership interest or shareholding would itself, if it were transferred, qualify for business relief.) Any land or building, machinery or plant which, immediately before the transfer, was - used wholly or mainly for the purpose of a business carried on by the transferor - settled property in which the transferor was beneficially entitled to an interest in possession - transferred while the business itself was retained. In practice, this is relevant only to lifetime transfers of the settled assets by themselves. Where the transfer is of the transferor's business and the qualifying settled property used in the business, relief will normally be available at 100%. For the purpose of the relief, 'business' includes any business carried on in the exercise of a profession or vocation. For more information on the various property reliefs available and the specifics regarding them please visit the inland revenue site and page relating to this area at:- http://www.inlandrevenue.gov.uk/pdfs/iht17.htm#2
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