Reconsidering Inheritance Tax

Inheritance tax (IHT) is tax due on the estate upon someone’s death and is one of the most challenging taxes for those seeking to pass on their wealth. It’s charged at 40% above the personal allowance of £325,000 (nil rate band). There is no IHT liability if assets are either below the threshold or if assets are left to your spouse, civil partner or charity.

The total threshold can increase to £500,000 using the Residential nil rate band for passing your family home to your children or grandchildren and if your estate is worth less than £2 million.

Individuals can benefit from two nil rate bands and two residential nil rate bands, as allowances can be transferred between spouses as percentages on first death.

With the average house price constantly rising, if you think IHT planning is only for the wealthy – you might want to think again. Inheritance tax planning is one of the easiest ways to save money and make the most of wh