Some transactions are exempt from inheritance tax. The range of exempt transactions is wide and confusing.
Some exemptions apply only to lifetime transfers, some apply only to the deemed transfer on death, and some apply to both lifetime transfers and the deemed transfer on death.
The main exemptions are as follows.
This covers those exemptions that only apply to lifetime transfers (e.g. gifts made by you while you are alive rather than by your will). Taxation will only apply to money which exceeds the levels set by these exemptions, if the giver dies within seven years of making the gifts or payments. In some cases this may be 14 years – see 1.15.4.