Beware IHT pitfalls

On the face of it, inheritance tax (IHT) is pretty simple: make chargeable transfers, either during lifetime or on death and, if the total over seven years exceeds the nil rate band (NRB), tax is payable. There are, however, exemptions and reliefs that are taken into account and, if they are used properly, the impact of the tax can be minimised or even eliminated. But care must be exercised, since there are a number of pitfalls waiting to trap the unwary. Here we look at the most commonly encountered snags and misunderstandings. Taper relief Many people are well aware of taper relie...