Inheritance tax is a tax charged on the estate — the property, money and possessions — of someone who has died. In the UK, no inheritance tax is normally due if the estate is worth less than £325,000, or if everything above that threshold goes to a spouse, civil partner, charity or community amateur sports club. The standard rate is 40%, charged only on the part of the estate above the available tax-free threshold. ## What is the inheritance tax threshold? Every person has a tax-free allowance, the nil-rate band, set at £325,000 and frozen since 2009. If the estate is worth less, no inheritance tax is due. The allowance is set out on [GOV.UK](https://www.gov.uk/inheritance-tax). | Allowance | Amount | Condition | | --- | --- | --- | | Nil-rate band | £325,000 | Every estate | | Residence nil-rate band | Up to £175,000 | Home left to children or grandchildren | | Single person, combined | Up to £500,000 | Where the home condition is met | | Married couple, combined | Up to £1,000,000 | Both partners' unused allowances combined | | Standard rate above threshold | 40% | 36% if 10%+ goes to charity | The thresholds are frozen until 5 April 2031, according to [Fairchild Oldfield](https://www.fairchildoldfield.co.uk/how-much-can-you-inherit-tax-free.html). ## How much inheritance tax is charged? Only the value above the threshold is taxed. GOV.UK's example: an estate worth £500,000 with a £325,000 threshold pays 40% of £175,000. It can pay a reduced 36% rate on some assets if 10% or more of its net value is left to charity in the will. ## What about the family home? If a home is left to children — including adopted, foster or stepchildren — or grandchildren, the tax-free threshold can rise to £500,000. The extra allowance, the residence nil-rate band, is worth up to £175,000, but it tapers away once the estate is worth more than £2 million. ## What about gifts made before death? Some gifts may be taxed after death. No tax is due if the person lives for seven years after giving a gift — the seven-year rule. If they die within seven years, taper relief cuts the tax on a sliding scale, from 32% down to 8% depending on how long before death the gift was made. Up to £3,000 can also be given away tax free each tax year under the annual exemption. ## Who pays inheritance tax? It is paid to HM Revenue and Customs from the estate's funds by the person dealing with the estate — the executor, if there is a will. Beneficiaries do not normally pay tax on what they inherit. ## Frequently asked questions **Do I pay inheritance tax on what I inherit?** Normally no — the estate pays it before assets are distributed. **Do the thresholds change?** The bands are frozen until 5 April 2031, but tax rules change — check the official [GOV.UK](https://www.gov.uk/inheritance-tax) page before acting. This is general information, not personal tax advice.