How Much Inheritance Tax Will I Pay?

Culverhouse & Co
13 hours ago
2 min read

Inheritance Tax (IHT) is charged on the value of your estate when you pass away - but how much you pay depends on a few key factors.

Before considering any planning strategies, it’s important to know what you’re entitled to. Speaking to a Chartered financial professional like ourselves can help you understand your options clearly and make informed decisions.

Speak to a Chartered adviser

The Basic Rule

In most cases:

There’s no tax to pay if your estate is below £325,000
Anything above that threshold is typically taxed at 40%

For example, if your estate is worth £500,000, the tax is usually calculated on the amount above £325,000 - not the full value.

When You Might Pay Less (or Nothing)

You may not pay inheritance tax (or pay less) if:

You leave assets to a spouse or civil partner
You pass wealth to charity
You qualify for additional allowances, such as when passing on a family home

In some cases, thresholds can effectively increase, especially for married couples.

What About Gifts?

Gifts made during your lifetime can still be counted, depending on timing. If you give away significant assets and pass away within seven years, they may still be included in your estate, although the tax may reduce over time.

Who Actually Pays the Tax?

Inheritance tax is usually paid from your estate before anything is distributed. This means your beneficiaries don’t typically pay the tax directly, but it does reduce what they receive.