Six Inheritance Tax FAQs
Inheritance Tax, often shortened to IHT, is a tax that may need to be paid when someone dies and leaves behind money, property, or any other valuable possessions. Here we share six frequently asked questions about the most important parts of Inheritance Tax.
What is IHT?
The standard rate of IHT is 40%, but this only applies to the amount of the estate that goes over the current threshold, which is £325,000 as of 2025. A London law firm, like Forsters, can help you navigate the complexities of Inheritance Tax and work out how much you would owe.
Who is responsible for paying IHT?
The person responsible for arranging the payment of Inheritance Tax is usually the executor of the will, or if there is no will, it will be the administrator of the estate.
When is IHT due?
Inheritance Tax is typically due within six months of the person’s death, and if the bill is not paid on time, HMRC may begin charging interest on the unpaid amount. In some cases, if the estate includes property, such as a house, the tax can be paid in yearly installments over ten years, but the first instalment must still be made within that initial six-month period.
How can I pay an IHT bill?
IHT bills can be paid from the funds in the deceased’s bank accounts, by selling assets, or by using money from life insurance policies placed in trust.
Who is exempt from paying IHT?
Certain people and gifts are exempt from Inheritance Tax. This includes anything left to a spouse or civil partner, provided they live in the UK.
On what amount is IHT payable?
Inheritance Tax is only payable on the value of the estate that exceeds the tax-free threshold of £325,000, although this can be increased if a home is passed on to direct descendants.
