Tax Estate
The tax estate includes:
- all of the deceased's assets, whether real estate or personal estate, and includes even small-value items such as the contents of his or her home;
- any gifts not reasonable presents (e.g. see birthday or see marriage below) or gifts of income not affecting the lifestyle or affecting significantly the finances of the person made by the deceased in the seven years before death (subject to a tapered relief for each year within the seven years);
- some assets which were not owned by the deceased but which are affected by the death (the most common example is a life interest in a trust, also technically known as an interest in possession);
- gifts with reservation of benefit. These are gifts where the legal ownership passes to the recipient. However, the donor continues to enjoy the benefit of the asset either rent free or at reduced cost. The seven-year period outlined above does not begin counting down whilst a gift is considered to be under a reservation of benefit.
There is also a charge on "lifetime chargeable transfers" into certain trusts (and a recalculation of those charges if the giver dies within seven years), and trusts themselves have an inheritance tax regime. See Taxation of trusts (United Kingdom).
Read more about this topic: Inheritance Tax (United Kingdom)
Famous quotes containing the words tax and/or estate:
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—Henry David Thoreau (1817–1862)
“Never let the estate decrease in your hands. It is only by such resolutions as that that English noblemen and English gentlemen can preserve their country. I cannot bear to see property changing hands.”
—Anthony Trollope (1815–1882)