Inheritance Tax

What is Inheritance Tax?

Inheritance Tax is a tax on a person's estate when they die. It is due when a person’s estate including their property and possessions are in total worth more than £325,000 when they die or £650,000 if they have been previously widowed. If your estate is worth over £325,000 its worth considering getting some advice.

How much is Inheritance Tax?

The rate of Inheritance Tax is 40% on anything above the threshold.

Who pays the Inheritance Tax?

Usually the executor or personal representative for the person who has died pays the Inheritance Tax.

When do I have to pay the Inheritance Tax Bill?

It is part of applying for a grant of representation (probate) - once you've paid any tax due, you can collect the assets of the estate. Grant of representation gives you the legal right to access things like the person’s bank account or sell property etc. Ideally you will want to settle the Inheritance tax bill within 6 months as otherwise you're likely to pay interest and definitely within 12 months or there will be penalties. 

How can I prevent my beneficiaries from having a large bill to pay on my death?

There are various ways of helping with these issues and any advice we give you is on an individual basis.

I can just put my property in my childrens names can't I?

That would be deliberate deprivation of assets to avoid paying tax and the property value would still be taken into account for the Inheritance Tax.

 

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