Exemptions and Reliefs - Lifetime and Death Flashcards
What are the main exemptions that apply to both lifetime and death?
1) Spouse exemption
2) Charity exemption
What is the spouse exemption?
Fully exempt for all gifts between UK-domiciled spouses or civil partners
Is there a limit in value for spouse exemption?
Unlimited
Does spouse exemption apply to common-law spouses?
No
Does spouse exemption apply to unmarried partners?
No
Do conditional gifts (e.g. requiring 28 day survivorship) qualify for spouse exemption?
Yes, if conditions met within 12 months
If surviving spouse is receiving a life interest, does spouse exemption apply?
Yes
When does a life interest not apply to a spouse for spouse exemption?
If spouse only receives a remainder interest
What is charity exemption?
Gifts to charity are fully exempt
What must gift to charity be to be exempt?
1) Absolute (not in remainder)
2) Made to a qualified charity
Do conditional gifts apply to charity?
Yes, if conditions met within 12 months
What is the benefit if a testator leaves 10%+ of his estate to charity?
Estate may qualify for reduced IHT of 36%
What is business property relief?
Reduces IHT on certain business assets
What is agricultural property relief?
Reduces IHT on qualifying agricultural property
What is political party exemption?
Gifts to political parties are exempt
What are gifts for national purposes?
Gifts to national institutions such as British Museum are exempt
What is gifts to heritage maintenance funds?
For maintaining historic sites, will be exempt
What is gifts to land to housing associations?
Gifts of land to social landlords are exempt
What are gifts to employee benefit trusts?
Subject to strict conditions and anti-avoidance rules
What is an important thing to note for spouse exemption and charity exemption?
1) Spouse – life interests apply, remainder interests don’t
2) Charity – must be carefully worded, not be ambiguous as to the charity
