Will I have to Pay Inheritance Tax?

Posted: 15th October 2018

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By: Joanna Parkin

Are You In the Dark over Inheritance Tax?

 

Many people assume their estate is too small to be over the limit for Inheritance Tax (IHT). Here’s a very brief guide to help you decide whether it would apply to you:

 

 

  • Inheritance Tax (IHT) is a tax payable from the estate of someone who has died.

 

  • Each person has an allowance or ‘Nil Rate Band’ (NRB) of £325k, if the estate is worth more than this then IHT may be due.

 

  • There are further tax reliefs and allowances that may be available eg the Residential Nil Rate Band and Business Relief. There are criteria that must be met in order to benefit from the reliefs and you should seek advice on this when you make your Will.

 

  • IHT is charged at 40% on the value of the estate above the threshold. Even if no IHT is payable the Executors will still need to report the value of the estate to HMRC.

 

  • Anything you leave to your spouse or civil partner will be exempt from IHT. This doesn’t apply to unmarried couples who live together.

 

This is a very brief overview of the IHT position. If you need expert advice and want to know more please contact me, Joanna Parkin joanna@fouroakslegalservices.com 0121 308 8231

I am a Solicitor specialising in Wills, Probate and Estate Planning and a member of the Burton Wire and Lichfield Wire Networking groups. I offer a free Will review service to all Wire members and their families and am happy to have an initial informal chat with you with no obligation to see if I can help .