From: "Ed" 
Newsgroups: uk.finance
Subject: Question regarding Inheritance Tax, exemptions and gifts
Date: Sat, 14 Feb 2004 14:29:12 -0000

Hi,

I understand that when someone dies, transfers upon death to their spouse
are exempt from IHT. So when calculating the value of the estate for IHT
purpose is the following equation correct?

Total value of deceased's assets - exemptions (eg transfers to spouse) - nil
rate band limit (255,000ukp) = amount liable for IHT

And what about cash gifts made by the deceased to their children within the
last 7 years. Are they included as part of the total value of the deceased's
assets in the calculation above or do they all automatically become liable
for IHT (40% but taking into account tapering relief).

Finally, if the gifts were paid out from a joint account held by the
deceased and their spouse will this have any effect on the amount of IHT
payable?

Would really appreciate any answers to these questions.

Thanks.