Inheritance tax definition

Inheritance tax is a government tax levied on the ‘estate’ (property, money, possessions) of a deceased person. There is no tax charged on the first £325,000 inherited, but any value above this threshold is charged at 40%. Inheritance tax rates are expected to be frozen until 2018/19.

Usually the ‘executor’ of the will or the ‘administrator’ of the estate pays the tax using funds from the estate. Should the inheritance be held in a trust, then the trustee will pay.

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