An introduction to inheritance tax (IHT)

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

This guidance note provides a background to the basic principles of IHT, including the loss to the donor principle, chargeable transfers and transfers that are not subject to inheritance tax.

Background to inheritance tax

Inheritance tax is a tax on the value passing from one individual to another person. This typically arises when an individual dies and all of the property that they own (their ‘estate’) passes to beneficiaries. An individual may also transfer their assets to others during lifetime. This could be an outright gift of assets to another person or a gift into trust.

Assets in trust are held by trustees for the benefit of others, whose entitlement to them is restricted in some way. Special inheritance tax rules apply to trusts to reflect the separation of legal and beneficial ownership.

IHT arising on a death estate is a tax on the donor ― the person who is transferring the asset. It is calculated with reference to their estate. It is not a tax on the beneficiaries,

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

TAKE A FREE TRIAL

Popular Articles

Corporation Tax

Temporary differences

Temporary differencesCalculation of temporary differencesThe temporary difference arising in respect of an asset or liability is calculated by comparing the carrying value of that asset or liability with its tax base.IAS 12 uses the concept of taxable or deductible temporary differences. Whether a

14 Jul 2020 13:49 | Produced by Tolley in association with Malcolm Greenbaum Read more

Corporation Tax

Overseas property businesses for companies

Overseas property businesses for companiesOverviewReal estate income is generally taxed where the property is located; the UK tax treaties generally allow the jurisdiction where the land is located to tax income from the land.Therefore, a UK company with overseas property may be subject to tax in

14 Jul 2020 12:22 | Produced by Tolley in association with Rob Durrant-Walker of Crane Dale Tax Read more

Trusts and Inheritance Tax

Bare trusts ― income tax and CGT

Bare trusts ― income tax and CGTThis guidance note explains how trustees of bare trusts are treated for income tax and capital gains purposes. Although a bare trust is, in equity, a type of trust, for both income tax and capital gains tax purposes its existence is transparent. This means that no tax

14 Jul 2020 15:34 | Produced by Tolley Read more

UU��ֱ��