Inheritance Tax reduced rate calculator: Are you entitled to a reduced rate for IHT? | Personal Finance | Finance
Typically one does not have to pay Inheritance Tax if the value of an estate is below the Nill Rate Band of £325,000, if you leave everything above the threshold to a spouse or civil partner or if you leave everything above the threshold to an exempt beneficiary such as a charity.
If the value of an estate is above the Nill Rate Band then it will be classed as part of your estate and could be taxed.
The current Inheritance Tax rate is 40 percent.
For instance, if an estate is worth £625,000, tax will be charged on the £300,000 above the Nill Rate Band which means tax would 40 percent of this figure – £120,000.