Home / Legal principles of life insurance / - Inheritance Tax
The way the tax works is that all chargeable transfers after 26 March 1974 are totted up and tax is payable once the threshold is reached.
However, once a transfer is more than seven years old it drops out of the totting-up.
When death occurs, the estate left is added to the total of non-exempt lifetime gifts in the previous seven years in order to find the tax rates applicable. In some circumstances this 'cumulation period' can be as long as 14 years. The rate of tax currently charged on death is 40%.
The following table shows the different thresholds in use for deaths between 1990 and 2010.
Tax Year Threshold
06.04.1990 to 05.04.1991 |
£128,000 |
06.04.1990 to 05.04.1991 |
£128,000 |
06.04.1991 to 05.04.1992 |
£140,000 |
10.03.1992 to 05.04.1995 |
£150,000 |
06.04.1995 to 05.04.1996 |
£154,000 |
06.04.1996 to 05.04.1997 |
£200,000 |
06.04.1997 to 05.04.1998 |
£215,000 |
06.04.1998 to 05.04.1999 |
£223,000 |
06.04.1999 to 05.04.2000 |
£231,000 |
06.04.2000 to 05.04.2001 |
£234,000 |
06.04.2001 to 05.04.2002 |
£242,000 |
06.04.2002 to 05.04.2003 |
£250,000 |
06.04.2003 to 05.04.2004 |
£255,000 |
06.04.2004 to 05.04.2005 |
£263,000 |
06.04.2005 to 05.04.2006 |
£275,000 |
06.04.2006 to 05.04.2007 |
£285,000 |
06.04.2007 to 05.04.2008 |
£300,000 |
06.04.2008 to 05.04.2009 |
£312,000 |
06.04.2009 to 05.04.2010 |
£325,000 |
Lifetime Transfers
IHT is charged on the value transferred by a chargeable transfer.
A transfer of value is any disposition made by a transfer or by which the value of his estate immediately afterwards is less than it would have been if the disposition had not been made.
The tax therefore affects only dispositions in the nature of a gift or part gift, and does not affect commercial transactions where full consideration is received, as there is then no loss to the estate. For lifetime transfers the tax rate is currently 20%.
Definitions
Per capita means by the head.
Per stirpes means by descent. It is inherited through their parent and not by their own right.
Where property divides per capita, it is divided into as many shares as there are children. Where per stirpes, the share that would have fallen to the predeceasing parent, if alive, is divided equally among his/her children.
`Child' and `children' include a child or children adopted by the deceased under the Adoption of Children Acts.
06 August 2008 17:27:22
An antibiotic developed from maggots may be used to fend off different types of bacteria including certain types of the deadly methicillin-resistant Staphylococcus aureus (MRSA), Fox news reported.
Students from Swansea undertook the study and they believe that maggots may now be used to fight superbug infections in hospitals.
Those with life insurance policies maybe interested to know that the team developed a drug called Seraticin that is made from secretions of green bottle fly larvae.
They now believe that they may be able to tackle up to 12 strains of the superbug and that it could be effective against E.coli and C.diff.
Live maggots have recently been used on patient's wounds to help fight MRSA by eating dead tissue, the Mirror reported.
UK life insurance policyholders have learnt that new research from the US has found that patients who are carrying MRSA for long periods of time are at an increased risk of infection and death.
06 August 2008 17:22:31
Those without life insurance policies will be pleased to hear about a proposed program that involves vaccinating children against flu in order to provide protection for the rest of the population.
Whilst the Daily Mail claimed that running the programme could cut flu infection rates by 70 per cent, the Daily Telegraph reported that "flu could be virtually wiped out if all under 16s were vaccinated against the disease".
A similar programe was considered and subsequently rejected in 2006 by the Joint Committee on Vaccinations and Immunisation, the NHS reported.
New research published in the Lancet this week suggested that the influenza vaccine did not provide as much protection as was previously thought.
In the study a group of 3,500 individuals were tested and it was uncovered that in those over 65 there was no link between the flu vaccination and the risk of those people contracting pneumonia.
UK life insurance provides cover in case of injury or illness.
05 August 2008 17:34:54
Those with and without life insurance policies may be interested to know that a trial of a vaccine for HIV patients which allows them to take breaks from their regular medication is planned, the BBC reported.
The trial, which was announced at the Aids 2008 conference in Mexico City, will involve 345 patients in both the US and Europe and the results are due by the end of 2009.
It is hoped that the vaccine could help alleviate side effects associated with the drugs currently used to treat the virus and may help delay the emergence of strains of HIV that are resistant to the drugs.
Dr Barry Peters, of Kings College London, who is leading the research in the UK, said: "A successful immunotherapeutic HIV vaccine would give patients and doctors enormous advantages over current treatments, both in developed and developing countries."
Whilst Dr Peters has qualified that the vaccine being trialled is not the "complete answer", it could go some way to helping produce a "full" vaccine.
UK life insurance provides policy holders with cover in case of illness or injury.
