Passing on an inheritance

With rising property prices bringing even modest homes into the inheritance tax (IHT) net, careful planning may be required to ensure that your loved ones aren’t left with nasty surprises when you pass on your estate. IHT is paid at 40% on the value of your estate – your property, money and possessions, over £325,000 (the nil rate band). Married couples and civil partners can leave up to double this (£650,000) IHT-free.

Even with a combined band of £650,000 many couples have found increasing house prices mean their heirs are facing a tax bill on their death. In extreme cases families are forced to take out loans or sell property to pay the tax.

It’s impossible to predict what the exact value of your estate will be. However, it’s worth taking the time to understand the overall position your family will be in and planning ahead to give you peace of mind that your loved ones will receive what you want them to and reduce the impact of inheritance tax.