Bite sized bits – Inheritance Tax (IHT)

IHT stands for Inheritance Tax and is a tax that is levied on the estate of deceased individuals in the UK. The tax is based on the value of the assets that are left behind by the deceased, including property, savings, investments and possessions.

The current threshold for Inheritance Tax is £325,000, which means that if the value of the estate is below this amount, then no tax is payable. However, if the value of the estate exceeds this threshold, then the excess is subject to a tax rate of 40%.

There are some exemptions and reliefs available that can reduce the amount of Inheritance Tax payable, including:

1. Spouse or Civil Partner Exemption: Assets left to a spouse or civil partner are exempt from Inheritance Tax.

2. Nil-rate Band: Each individual has a