Inheritance tax guide
Inheritance tax is applied to some estates after a person dies. Your estate means everything you own, including money, property, possessions and investments (your assets).
Your solicitor or Institute of Professional Will Writers member will be able to advise you in more detail about inheritance tax (IHT), and more importantly, they can tailor this advice to your particular circumstances.
What is inheritance tax?
Inheritance tax (IHT) can be paid following your death on the value of your estate (and can also include the value of substantial lifetime gifts you have made and some types of trust funds).
The new 10% IHT charity relief
You may also have heard that if you leave over 10% of your estate to charity, that the rate of any IHT due (on any part of your estate where IHT is due) would be reduced from 40% to 36%.
If your estate is over £325,000, use of this would enable you to leave a legacy to charity, whilst reducing the rate of IHT payable which could possibly have a positive impact on non-charity beneficiaries. In some circumstances, you can use this to leave a gift to charity at no cost to the beneficiaries in the Will. Again, this is quite a technical provision and if it is of interest to you, we would suggest that you speak to a solicitor.
Changes to the IHT allowance or the value of your estate could make a big difference to the amount of tax on your assets, and tax rules do change, so be sure to review your Will frequently. It's worth seeking professional advice from a solictior, accountant or other financial advisor.
Please note that the rules are different if you die intestate (without a Will).
Find out more
Visit GOV UK to find out more about the rules and exemptions around inheritance tax.