economy
Will you be liable for inheritance tax?
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TL;DR
- Inheritance tax applies to assets like property and investments that form an estate upon death.
- The current tax-free allowance (nil-rate band) is £325,000, with a 40% tax rate on amounts exceeding this.
- The Residence Nil-Rate Band offers an additional allowance of up to £175,000 if a home is left to children or grandchildren.
- From April 6, 2027, remaining pensions will be included in estate calculations for inheritance tax.
- Gifting up to £3,000 per year is tax-free, and gifts made more than seven years before death are outside the estate.
- Professional advice from financial planners can help manage inheritance tax liabilities.