Inheritance tax
When you die, everything you own outright goes into Legacies to Britain Yearly Meeting,
your estate. Gifts you have made within seven years or to any other UK charity, are free from
of your death have also to be taken into account. After inheritance tax. This means that they are deducted
your debts and funeral expenses have been paid, the from your estate before it is assessed for tax.
amount above the threshold will have inheritance tax
deducted from it, unless it passes to your spouse or For instance, if your estate is worth £20,000 more than
civil partner, or to a UK charity. The rate of inheritance the threshold amount, then leaving that £20,000 to the
tax is presently 40%. Society or another charitable organisation reduces the
total taxable value of your estate to the threshold, and
Inheritance tax thresholds change each year, although no inheritance tax is due. The entire £20,000 goes to
the annual changes have been set by HM Treasury support Quaker work; if you left that amount to your
until 2010–11. The threshold above which inheritance heirs, £8,000 of it would be payable to the Treasury as
tax is paid will be: inheritance tax.
Financial year For individuals For married couples This insert gives only a broad outline of inheritance
and civil partners tax; there are different kinds of relief for business
2008–09 £312,000 £624,000 assets and other types of property.
2009–10 £325,000 £650,000
For more information
2010–11 £350,000 £700,000
You can find more information at www.direct.gov.uk
(search for “inheritance tax”). A professional advisor
such as your accountant or solicitor will be able to give
you more detailed advice.
June 2008
How inheritance tax could affect your estate
A legacy to charity can reduce the
overall value of your estate to below
the inheritance tax threshold.
For every £1 above the
threshold amount,
40p must be paid in tax.
Threshold amount*
No tax is payable
at all up to the
threshold amount.
This estate is This estate is
worth less than worth more than
the threshold and the threshold
no tax is paid. amount, and
is liable for
inheritance tax.
*In 2008–09, this threshold stands at £312,000;
in 2009-10 it rises to £325,000; and
in 2010-11 it will rise to £350,000.