Inheritance Tax

A tax on gifts made by an individual in the seven years before death, and on the value of assets when he or she dies. The UK tax rate in 2007-08 on the value of the estate at death was 40%, and applied to any amount over £300,000 to be paid by the deceaseds estate. Certain types of gift are exempt from IHT. The most important of these are gifts between spouses either during life or on death, which are tax-free and gifts to charities.