Inheritance tax is set out by the government and may be payable on death depending on the value of your estate.
If a person’s estate, which would include their property, money and possessions, is worth more than £325,000, then inheritance tax would have to be paid. If the person’s estate is below £325,000, then inheritance tax does not have to be paid - this is known as the Nil Rate Band.
People who are married or registered civil partners do not have to pay any Inheritance Tax on money or property left to them by their spouse. The rules for couples mean it is usually best for them to leave everything to each other. If a spouse passes away, they can transfer their Nil Rate Band to their partner meaning a combined Nil Rate Band of £650,000.
Anything above the inheritance tax threshold, which is £325,000 is taxed at 40 per cent. The rate can be reduced to 36 per cent if 10 per cent (or more) of a person’s estate is left to charity. All gifts in Wills to charity are exempt from Inheritance Tax.
The rules of inheritance tax and the exemptions that apply can be complicated and should be discussed with your solicitor. Further details are on the HM Revenue & Customs website.
We offer help and support if you're making or updating your Will. To get in touch with us please either: