Inheritance Tax Threshold

The inheritance tax threshold is set each year by the Chancellor. For the current tax year it is £312,000 (or £624,000 for married couples and civil parners).

What this means is that once the value of your assets (including all your belongings, property and investments etc) reaches this level, your beneficiaries will be liable to tax at 40% on you death.

Once the value of your assets reaches the inheritance tax threshold (also known as the nil rate band), any excess over this value will be taxed at 40% on your death.

Each year the inheritance tax threshold is increased. However, it is common for the threshold to only increase by a small amount. What has happened in recent years has been that assets, especially property, have increased by more than the inheritance tax threshold. For example, last year the inheritance tax threshold was £300,000. The increase was therefore only 4% (this while property was increasing at more than 10% in many areas). The result is that more and more people are finding that their assets fall over the inheritance tax threshold, and others are finding that their estates are facing even more tax.

Otherwise, why not investigate the rest of this section on inheritance tax - there are many ways to avoid this tax, even if your assets go over the threshold.

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