Taper relief IHT

castle96

the end result Is an exemption, ie a lower amount of tax paid

Keep_pedalling

castle96 said:

the end result Is an exemption, ie a lower amount of tax paid

You have a really strange idea what an exemption is.

castle96

If you take something out of an equation/calc and less tax is paid, it's an exemption

uknick

castle96 said:

If you take something out of an equation/calc and less tax is paid, it's an exemption

To be pedantic, is it an exemption or is it a rate of 0% IHT applied to gifts that meet the criteria?  Similar to some of the savings income tax rates.  They aren't excluded from the income tax equation, just charged at 0% tax.

To my mind an exemption is never in the equation, ISA interest for example when calculating income tax.  But, all gifts are in the original equation, just some drop out along the way; 7 year, £k allowable gift, £250 small gifts etc.

Keep_pedalling

uknick said:

castle96 said:

If you take something out of an equation/calc and less tax is paid, it's an exemption

To be pedantic, is it an exemption or is it a rate of 0% IHT applied to gifts that meet the criteria?  Similar to some of the savings income tax rates.  They aren't excluded from the income tax equation, just charged at 0% tax.

To my mind an exemption is never in the equation, ISA interest for example when calculating income tax.  But, all gifts are in the original equation, just some drop out along the way; 7 year, £k allowable gift, £250 small gifts etc.

The NRB and RNRB are exemptions in that there is no tax to pay on them, the same applies to the annual gift exemption, gifts in contemplation of marriage,  and gifts out of excess income.

Other gifts are only potentially exempt and require you to survive 7 years before they become exempt. This is also true of the portion of gifts subject to TR which also only become exempt after 7 years, unless you come from a parallel universe where exempt means you still pay something.