What about inheritance tax?
If, after payment of your debts and any gifts to your spouse or to charity, the value of your estate is more than £325,000, then Inheritance Tax will be payable at 40% on the excess over this amount.
However, if when you die you are a widow/widower or bereaved civil partner whose late spouse or partner did not fully use his or her IHT allowance, however much it was at the time they died, then you also receive that partner’s unused tax allowance, which can operate to increase yours to as much as £650,000. We’ll answer the question ‘Inheritance Tax and can I avoid the taxman’ shortly.
What is a gift made ‘free of tax’?
A gift is free of tax when any Inheritance Tax, if it is payable, is to be paid out of your Residuary Estate and not deducted from the gift itself. All gifts to charities are by law totally exempt of Inheritance Tax.
There is an additional Nil Rate Band of £175,000 which can be used by home
owners but only when leaving he property to direct descendants, any unused can again be passed on to a spouse/civil partner.
