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The speech
The Chancellor's PBR speech, made to the House of Commons on 9 October 2007, can be found on the Treasury website at http://www.hm-treasury.gov.uk/pbr_csr/pbr_csr07_speech.cfm
Inheritance tax
The Government announced that, with immediate effect, i.e. from 9 October 2007, the inheritance tax allowance will be transferable between spouses or between civil partners. This will enable all married couples and civil partners to benefit automatically from double the tax-free allowance in addition to their existing entitlement to full spouse relief.
This measure will also be extended to all widows, widowers and bereaved civil partners.
As a result, the married couples' and civil partners' allowance now stands at £600,000 for 2007-08 and will rise to £700,000 in April 2010. Budget 2007 announced that the individual inheritance tax allowance will rise from £300,000 in 2007-08 to £350,000 in April 2010.
The provisions for alternatively secured pensions (ASP) will also be changed. Currently, a charge arises on left-over ASP funds once a relevant dependant's pension benefits cease and the rates of tax are those applying at the date of that event rather than as at the date of death of the scheme member.
This rule will be modified so that, if the nil-rate band was not fully used when the original 'owner' of the ASP died, the same proportion that was unused will be applied to the amount of the nil
