Inheritance Tax Knowledge Base
Practical, plain-English guides to UK Inheritance Tax — covering the nil-rate band, gifts, reliefs, trusts, the estate process, and IHT planning. Every article references official HMRC and GOV.UK sources.
Your complete guide to Inheritance Tax — 34 articles covering IHT fundamentals, gifts, reliefs, trusts, the estate process, planning, and more.
IHT Fundamentals
What Is Inheritance Tax?
The basics: what IHT is, the 40% rate, and when it applies.
Who Pays Inheritance Tax?
Executors, personal representatives, and who is ultimately liable.
The Nil-Rate Band (£325,000)
The tax-free threshold for estates, frozen until April 2028.
The Residence Nil-Rate Band
An extra £175,000 when passing a home to direct descendants.
Calculating the Estate Value
Assets, liabilities, gifts, and arriving at the taxable estate.
Gifts & Lifetime Transfers
Potentially Exempt Transfers (PETs)
Gifts to individuals that become exempt after 7 years.
Chargeable Lifetime Transfers
Gifts into trusts: the 20% entry charge and the 7-year clock.
The 7-Year Rule
How surviving 7 years after a gift removes it from your estate.
Taper Relief
Reduced IHT on gifts made 3–7 years before death.
Annual Exemption (£3,000)
The yearly IHT-free gift allowance and carrying forward unused amounts.
Small Gifts & Other Exemptions
£250 small gifts, wedding gifts, and other IHT-free allowances.
Gifts from Normal Expenditure
Unlimited IHT-free gifts made regularly from surplus income.
Gifts to Charity & the 36% Rate
How leaving 10%+ of your net estate to charity reduces IHT to 36%.
Reliefs & Exemptions
Spouse & Civil Partner Exemption
Unlimited IHT-free transfers between spouses and civil partners.
Business Property Relief (BPR)
50% or 100% relief on qualifying business assets — with April 2026 changes.
Agricultural Property Relief (APR)
IHT relief on farmland and agricultural property.
Woodland Relief
Deferring IHT on the value of timber until it is sold.
Charity Exemption & 36% Rate
Full exemption for gifts to charity and the reduced 36% estate rate.
Trusts & IHT
Trusts and Inheritance Tax
How IHT applies to different types of trust: discretionary, bare, and interest in possession.
IHT on Trust Creation
The 20% entry charge on chargeable lifetime transfers into trust.
10-Year Anniversary Charges
The periodic charge on relevant property trusts: up to 6% every 10 years.
Exit Charges on Trusts
IHT when capital leaves a relevant property trust between anniversaries.
The Estate Process
Probate and IHT Overview
How probate and IHT interact: the timeline from death to grant.
The IHT400 Form
HMRC’s Inheritance Tax account: what it covers and how to complete it.
Excepted Estates
Simpler reporting when an estate falls below the IHT threshold.
Paying IHT (Instalments Option)
How to pay, when to pay, and spreading the bill over 10 years.
Transferable Nil-Rate Band
Claiming a deceased spouse’s unused NRB — potentially doubling the threshold.
IHT Planning
IHT Planning Basics
Core strategies to reduce or eliminate your Inheritance Tax liability.
Using Trusts for IHT Planning
Discretionary trusts, bare trusts, and loan schemes for estate planning.
Life Insurance and IHT
Writing policies in trust so the payout falls outside your estate.
Will Planning and IHT
How your will structure affects IHT: NRB legacies, flexible trusts, and more.
Questions?
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