Cash Gifts Allowance

[3puddings]

If your inheritance tax threshold is the maximum £1m, but your total estate is only worth £900,000 you don't pay inheritance tax.
However if you have also been generous before death and given away £200,000 cash to family members over the last 7 yrs, you will only liable to pay IHT for £100,000 of it in the 7yr sliding scale rule.
Am I right in saying this?

[sederunt]

The 7 year sliding scale rule will not apply because the gift total is less than the nil rate band.

[3puddings]

Thanks for replying.
Sorry for sounding daft, but I don't understand what you mean by 'the gift total is less than the nil rate band'

[sederunt]

Everyone has an IHT nil rate band allowance (NRB) £325,000 at present. You will have included the NRB allowance in arriving at the potential total IHT allowance of £1 million.

In the scenario you describe, gifts of £200,000 will use up £200,000 of the NRB allowance and there is no taper allowance (sliding scale).

[3puddings]

So the tax payable would be 40% of the £200,000?

[sederunt]

There is no tax payable on the gifts total, it uses up part of the NRB allowance.