Inheritance Tax : Tax And Tax

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Inheritance Tax FAQ’s

When a loved one passes away and leaves us a portion of their estate, there is often an inheritance tax attached to this estate, which will need to be paid. Here, we 'll examine exactly what that tax is, why it exists and if it applies to you, alongside many other common questions.

What is inheritance tax? - The clue is in the title, as it is quite literally a tax on your inheritance. Or, more accurately, on the estate of the person who has died. Basically, when you die, the government will assess how much your estate is worth and will take what it feels it is owed from this estate. Your estate will be made up of everything from the actual money in your bank, to any property or businesses you own, vehicles, investments and even life insurance payouts.

When do I have to pay inheritance tax? - You will have to pay inheritance tax on any estate worth £325,000 or above. This is known as the inheritance tax threshold. Above that amount, anything you leave behind is taxed. If the estate is worth less than this, no inheritance tax will be due. You will also be able to avoid inheritance tax if everything in the estate is being left to a spouse, civil partner or charity. If you’re married or in a civil partnership and your estate is worth less than £325,000, you can also transfer any unused threshold to your partner when you die, meaning their threshold can be as much as double this amount (£650,000).

What is the main residence nil rate band? - In July 2015,
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