Inheritance tax is a tax which arises on the death of an individual. It is a tax on the estate, or total value of the money and property, of a person who has died.
IHT is affecting a rapidly growing number of people, and this is largely due to the increase in the value of residential property. Examples of assets that would form part of an estate are: your home, its contents, your car, your bank and building society accounts, any stocks and shares, your jewellery, any antiques you have collected and any other investments you have accumulated over your lifetime, including your share of any jointly owned assets.
An estate will be subject to IHT if, on death, it exceeds the individual Nil Rate Band. This figure is currently frozen at £325,000, it will remain at this amount until the tax year 2014/15.
IHT is often called a ‘voluntary tax’ as there are so many ways to avoid it.