The current threshold for inheritance tax is £325,000 (for deaths occurring between 6th April 2020 and 5th April 2021) and anything over this is 40% taxable. This amount is set by the government and can change. There is an additional allowance of £175,000 if you leave your main residence to your children (so this increases the current threshold to £500,000.
There are ways you can reduce how much tax you'd need to pay.
- Leave some or all of your estate to a spouse or charity.
- Put some of your estate into trust.
- Take out specific types of life cover to pay the tax bill.
Our standard Life Insurance policy isn't likely to fit the needs to repay inheritance tax, so if you're unsure you should speak to a financial adviser.