Inheritance Tax (IHT)
Do you have an inheritance liability upon death?
Add up all your worthly possessions, (home, investments, cash, chattels, car) and minus any liabilities (mortgage, annual exempted and 7-year gifts) will equal your estate value.
The current threshold is £325,000 per person, therefore a married couple would have a threshold of £650,000. If the value of your estate exceeds that threshold then you will be liabile for IHT. Any value over the threshold will be taxed at 40%.
On top of the IHT threshold, there is now also a residential nil rate band, which as long as you give your main home to children, stepchildren or grandchildren, including when adopted or fostered is an additional threshold of £175,000 as of 2026/27.
A married couple could benefit from 1 million of a threshold if they gift their home to their child or grandchild.