Inheritance tax is a tax on the assets (property, money, and possessions) of a person who has passed away.
In the UK, inheritance tax is paid by the estate of the deceased person (the property, money, and possessions they leave behind) if the value of the estate is above a certain threshold. If the value of the estate is below this threshold, no inheritance tax is due.
There are several exemptions and reliefs available that can reduce the amount of inheritance tax due, such as the transferable nil-rate band (which allows a surviving spouse or civil partner to transfer any unused portion of their nil-rate band to their spouse or civil partner), and the residence nil-rate band (which allows an additional tax-free allowance for a property that is passed on to direct descendants).
The tax is typically paid by the executor or administrator of the deceased person’s estate before the assets are distributed to the beneficiaries.
