What is inheritance tax?

Inheritance tax is the tax to be paid on the estate that someone left behind. Debts and outstanding bills can be deducted from the gross estate value. Inheritance tax is usually 40% of the estate value above the threshold.

No inheritance tax is due if:

• The value of the estate is below the threshold of £325,000 (or £650,000 if the nil rate band of a deceased spouse or civil partner is available to transfer)
• Everything above the threshold of £325,000 is left to one of the following:
• Spouse or civil partner
• A charity
• A community amateur sports club

If you give your estate to your children or grandchildren, including foster children, adopted children or stepchildren, your threshold may be increased further.

Why should I consider legal assistance for inheritance tax planning?

An inheritance tax planning solicitor can advise you on how to share out your estate to avoid paying too much. There are different ways to reduce the amount of inheritance tax due:

• Giving out gifts while you are alive and surviving them by 7 years
• Leaving 10% or more to a charity in your Will
• When passing on business
• When owning woodland or a farm
• Creating a trust

However, what the best solution for you is depends on your estate, and your chosen beneficiaries. We can assist you with your questions on how inheritance tax might affect your own estate, feel free to contact us.

How do I pay for legal assistance?

We will always give you an estimate on how much we charge for our inheritance tax services during our initial consultation.

I've inherited an estate. Do I have to pay inheritance tax?

Inheritance tax is paid before you receive your share of the estate. It's the duty of the executor or administrator to report the estate value to HM Revenue and Customs and pay the inheritance tax bill from the estate before sharing it out.

Read our guide more information on the duties of an executor or administrator.

Do I have to pay inheritance tax if I receive a monetary gift during the donor's lifetime?

This is dependent on:

• the value of the gift
• the time you received it, in relation to the day the person who made the gift passed away
• the total amount of money they gifted to you or other beneficiaries.
• the value of the estate and the beneficiaries of the estate

For more detailed information, we advise you to read the government's website on inheritance tax.

Why choose Slater and Gordon?

We have solicitors who specialise in inheritance tax planning and are ready to offer you their expert legal advice. Contact us on 0330 107 5078 or online here to speak to our team for advice on inheritance tax.