Inheritance Tax (IHT) is a tax paid on your estate - which includes your property, money and possessions, paid upon your death.
There’s usually no Inheritance Tax to pay if the total value of your estate is below a certain threshold (currently £325,000), or if you leave everything above the threshold to your spouse, civil partner, a charity or a community amateur sports club.
If you give away your home to your children (including adopted, foster or stepchildren) or grandchildren the threshold can increase to £500,000.
The standard Inheritance Tax rate is 40%, applied only to the portion of your estate that exceeds the applicable threshold.
Certain assets may be exempt from IHT, and there are circumstances where the tax rate may be reduced, such as when leaving a portion of your estate to charity.
Inheritance Tax rules can be complex and may change over time. Consulting a professional adviser with expertise in estate planning can help ensure that allowances, exemptions, and reliefs are maximized, and that the estate is structured in a tax-efficient manner.
You may also be interested in...
