Inheritance Tax Planning

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Inheritance Tax exemptions

It is worth noting that there is a difference between IHT exemptions and IHT reliefs. Exemptions tend to be on payments made and transfers made. Whereas reliefs are normally applied to assets themselves such as business relief etc.

The main exemptions to know about are as follows:-

Spousal exemption

The most common exemption and also the most commonly used exemption is the between spouses. Any assets that transfer between husband and wife or officially recorded civil partners is completely free of any inheritance tax. These transfers also take place without using up any of the nil rate band which is why it is transferable under the Spouses threshold transfer.

Debts and liabilities against estate

This is not really an exemption in the true sense of the word but the fact is you don't pay tax as a result of it. Basically the revenue allow you to deduct any and all debts against the estate prior to calculating any inheritance tax liability.

Annual exemption

Everyone has an annual exemption to the value of £3,000. This amount can be carried forward a year but only one year if it is not use then it expires. So technically you could give away £6,000 in one year if you had not used it the year previous. Then the following year you would have a further £3,000 exemption to use.


There are certain gifts that are exempt from inheritance tax over and above the annual exemption of £3,000. Due to the fact that there is a few of these we have devoted a page to them that can be found by clicking on the box below marked GIFTS.

Regular Gifts

This is also covered in the section marked Gifts below.

Exempt Beneficiaries

It is worth knowing that some beneficiaries themselves are exempt. So any payment to them will just reduce your estate for inheritance tax purposes. They are as follows:-
The obvious one your husband/wife or civil partner.
Any UK registered charity
Some national organisations such as National Trust, Universities, and Museums
And finally United kingdom registered political parties.

IHT Calculator

Use our FREE tool to estimate the inheritance tax liability be due on your estate.

Glossary of Terms

Baffled by all the jargon? Then why not use our glossary to make things easier!


This section covers the various gifts available to you to utilise the tax free benefits open to you.


Here you will find all the exemptions which may enable you to pass on parts of your estate free of any inheritance tax.

The 7 Year Rule

Gift any part of your estate outside those allowable will create a potentially exempt transfer find out how you stand under the tax laws.

IHT relief's

There are certain relief's that like the exemptions allow for transfer to people without tax this section covers those.