How Inheritance Tax Works: Thresholds, Rules and Allowances

What is Inheritance Tax?

Inheritance Tax is a tax on the estate (the property, money and possessions) of someone who’s died.

Funds from your estate are used to pay Inheritance Tax to HM Revenue and Customs.

Common questions about Inheritance Tax

Who might need to pay Inheritance Tax on gifts?

People you give gifts to might have to pay Inheritance Tax, but only if you give away more than £325,000 and die within 7 years.

How is the value of an estate determined?

You need to value an estate for Inheritance Tax and report its value to HM Revenue and Customs.