They say there are only two certainties in life – death and taxes! It’s also an unfortunate truth that the two overlap, with inheritance tax a very real part of dealing with the death of a loved one, and often when things are still quite raw. In fact, any inheritance tax, which can amount to hundreds of thousands of pounds, must be paid by the end of the sixth month after the person has passed away.


But it is possible to legally avoid huge swathes of inheritance tax, and in some cases pay none at all, saving your loved ones any additional grief. Here’s what you need to know.


What exactly is inheritance tax?

Put simply, inheritance tax is the tax paid on someone’s assets after they die. These assets include any cash in the person’s various bank accounts, any investments they hold, properties, vehicles and businesses they might own, and any payouts that might be due from life insurance policies.


When you die, Her Majesty’s Revenue and Customs (HMRC) – the Government department responsible for collecting tax – assesses how much these assets are worth and deducts any debts. What’s left makes up the value of your estate.


How much will I pay?

The good news is there are some allowances that are not subject to these duties, but in short, your estate will owe tax at the standard rate of 40 per cent on anything above the £325,000 inheritance tax threshold when you die.


This means there is no tax to pay if your estate is valued below £325,000, although if you gift your home to your children or step-children on death, this threshold rises to £475,000.


You can also leave everything above the normal threshold to your spouse or civil partner, without leaving them with an inheritance tax bill.


Many gifts are exempt from inheritance tax or attract tax relief, and tax relief can also apply to businesses and agricultural property. It’s a complex matter and it makes sense to make a will to ensure not only that your wishes are carried out, but that all these considerations can be properly taken into account.


Is a will really necessary?

Many people can be wary of making a will as it can seem expensive, especially if you have no dependants. But if you don’t make a valid will, your assets will be paid out in accordance with certain rules, known as the rules of intestacy.


For example, one of these rules is that only the next of kin can inherit from an intestate person, so if you’re unmarried, legally separated or co-habiting, your partner can’t inherit anything they don’t jointly own.


We’ll talk more about this rule in the next in this blog series, but making a will is the first step in making sure that your estate will be shared out as you want it to be upon your death, and this should form part of your planning for inheritance tax.


Questions you need to consider

There are so many factors to take into account when looking at inheritance tax, from whether you’re married or in a civil partnership, to where you live, whether you have children, own your home, have life insurance, any gifts you might like to bestow upon those you love, and what tax relief your assets may attract.


As a first step, it makes sense to talk these things through with a qualified professional. Together with a solicitor to assist with your will, our inheritance tax planning service can help you understand all the issues involved in keeping as much of your hard-earned wealth with those who you would like to benefit.


Contact us today on 01642 244090, at or via our website at