- Think about how much money you need in your lifetime
- Gifting and pensions are the easiest ways to cut IHT
- We look at pros and cons of each strategy
Inheritance tax (IHT) has a reputation as one of the most disliked taxes in the country. With a combination of higher property prices and a frozen tax-free threshold, the government has been collecting an increasing amount of IHT, with receipts for April 2024 up by 7.2 per cent compared with the same month last year.
IHT is normally charged at 40 per cent on all assets in your estate that are above the tax-free threshold. This is set at £325,000 but can increase to £500,000 if you leave your home to your children or grandchildren. People who are married or in a civil partnership can combine the value of their thresholds. Anything you leave to your spouse, civil partner or charity is not subject to IHT.