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Re: Tax havens exposed in huge law firm leak
https://www.gov.uk/inheritance-tax/overview
https://www.gov.uk/inheritance-tax/gifts
Quote:
7-year rule
The original owner must live for 7 years after giving the gift. Any gifts made less than 7 years before death count towards the Inheritance Tax threshold (£325,000). They count towards the threshold before the rest of the estate.
If the donor gave away more than £325,000 of gifts in their final 7 years, tax is due on everything over that threshold.
Gifts made 3 to 7 years before the death
The rate of tax is reduced for gifts over the threshold made between 3 and 7 years before the person died. This is known as ‘taper relief’.
Years between gift and death Tax you pay
(if not qualified for reduced rate)
less than 3 40%
3 to 4 32%
4 to 5 24%
5 to 6 16%
6 to 7 8%
When you have to pay Inheritance Tax on a gift you received
If you received a gift from someone who died, you may have to pay Inheritance Tax on it. This could happen if both of the following are true:
they gave you the gift less than 7 years before they died
they gave £325,000 or more in gifts in the last 7 years of their life
HM Revenue and Customs (HMRC) will tell you if you have to pay Inheritance Tax.
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