Inheritance Tax is a tax paid on your estate (your property, money and possessions) when you die.
There’s usually no Inheritance Tax to pay if the 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%. It’s only charged on the part of your estate that’s above the threshold.
There are some things that are exempt from the tax, and some circumstances where the Inheritance Tax rate might be reduced. Inheritance Tax is a complex area and it’s a good idea to seek professional advice from an adviser with experience in estate planning.