Inheritance tax in the United Kingdom

Inheritance Tax is a tax on the estate of someone who has died; an estate comprises their property, money and possessions.

7 facts · 1 storiesDocument updated 2026-10-14

Established facts

The supplied GOV.UK guidance says an estate can pay a reduced rate of 36% on some assets if the will leaves at least 10% of its net value to charity. It defines net value as the estate's total value minus debts.
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The supplied GOV.UK guidance says there is normally no Inheritance Tax to pay when the estate's value is below the £325,000 threshold.
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The supplied GOV.UK guidance describes a standard Inheritance Tax rate of 40%, charged only on the part of the estate above the threshold.
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The supplied GOV.UK guidance explains that some gifts made during a person's lifetime may be taxed after their death. Depending on when the gift was made, taper relief may reduce the Inheritance Tax charged on that gift below 40%.
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The supplied GOV.UK guidance explains that estate funds are used to pay Inheritance Tax to HM Revenue and Customs. The person dealing with the estate makes the payment; where there is a will, that person is called the executor.
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The supplied GOV.UK guidance identifies Business Relief and Agricultural Relief as reliefs that allow some assets to be passed on free of Inheritance Tax or with a reduced bill.
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