When you die, the value of your estate is charged to inheritance tax. Any debts incurred prior to your death are deducted from this sum, as are the reasonable costs of your funeral. There are currently two rates of inheritance tax payable on death. Firstly, £325,000 will be charged to inheritance tax at 0%. This slice of your net estate is known as the 'nil per cent rate band' or the 'tax free band'. The balance of your estate is taxed at 40%, unless there is also available an unused proportion of the tax free band of a deceased spouse or deceased civil partner. If so, the inheritance tax can be further reduced.
A gift to your spouse or civil partner or to a charity is not charged to inheritance tax, either on your death or during your lifetime.
Call us on 01484 538121 to reduce the potential inheritance tax liability on your death.
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