The Inheritance Tax (IHT) Allowance is the amount of wealth that you can receive, tax-free, from someone who passed away. In the 2023/2024 tax year, it’s £325,000.
Sometimes the IHT Allowance can increase:
If the estate’s value is below the IHT Allowance, you’ll still need to report it to HMRC, even if you don’t need to pay any Inheritance Tax. Also, if your spouse or civil partner leaves everything to you, it’s all tax-free: any gifts between spouses and civil partners are tax-free.
We recommend using the HMRC IHT calculator, or for a full evaluation of your estate you can also contact our team. We can offer a consultation to discuss your qualifying assets and how this will affect the tax payable by your beneficiaries.
The threshold of tax-free inheritance for spouses is £1 million. They will only pay Inheritance Tax if you leave them an estate of more than £1 million.