Inheritance Tax is a tax on the estate of someone who has died, including their property, money and possessions. It is usually paid by the estate before assets are passed on to beneficiaries, rather than by the beneficiaries themselves.
The Nil Rate Band and reliefs
Every estate has a Nil Rate Band below which no Inheritance Tax is due, along with a residence nil rate band that can apply when a main home is left to direct descendants. Gifts made during a person's lifetime, business property, and transfers to a spouse or charity can also reduce the tax due.
Tax rules depend on individual circumstances and can change. This glossary is general information rather than personalised tax advice.