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inheritance tax quiz...help

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ath007 | 11:04 Thu 03rd Jan 2008 | Business & Finance
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Inheritance tax was reformed in the pre-budget report in October.How much can a husband,wife or a civil partner now leave before having to pay it?

a. �300,000
b. �600,000
c. �1 million
d. nothing
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A. �300,000

I'm sure I heard that amount from someone.
Its �300000 on the first death. If you bequeath it to your spouse/civil partner they can then add it to their own allowance to make �600000 on the second death. The rule is retrospective. It can only be used once. If you remarry you cannot add �300000 to the �600000 allowance you already have.

Still unfair to my mind as elderly siblings who live together or children who care for elderly parents do not benefit from this rule and may even have to sell their house to pay the tax. There are some perverse possibilities. eg if your son is getting married you could marry the person instead to pass your allowance on. I wonder if anyone has done that? Or how many bogus marriages will occur? It would have been simpler to just make the allowance a million quid.
None of those.

If they leave everything to their spouse/civil partner then no tax is payable.

They can leave �300K to others, but that's a separate issue, as is what happens on the second death..

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