Inheritance tax is calculated based on a threshold that can change. Currently, for the years 2023 to 2024, the threshold for inheritance tax is £325,000. This figure is also called the nil rate band. If an estate is worth more than £325,000, inheritance tax will need to be paid.
How do I know how much inheritance tax I need to pay?
Generally, inheritance tax is 40% of any value above the nil rate band currently standing at £325,000. If more than 10% of the net estate is donated to charity in a will, inheritance tax can be reduced from 40% to 36%.
Who is responsible for paying inheritance tax?
When a will is involved, the executor will be charged with paying the inheritance tax billout of the estate they have inherited either from existing money or from selling assets. If there is no will, payment will be arranged by the administrator.
When is inheritance tax due?
The aim is to pay inheritance tax as soon as possible. If inheritance tax has not been paid six months after someone has passed away, you may be charged interest and could be sent late payment penalties which can go up to £3,000.
We are aware that the process of applying for probate and managing assets can be daunting at a very emotional time, and that is why we are always on hand to offer our clients advice and guidance.
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