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Inheritance Tax in the UK is often called a "voluntary tax" as it is possible with careful planning, to reduce or even eliminate any liability to Inheritance Tax.
The main features of the tax are:
1 - Property passing on death between husband and wife is exempt unless either party is not domiciled in the UK, in which case the exemption is limited to £55,000
2 - Inheritance Tax is a levy paid on your estate after death, should it exceed the Nil Rate Band Limit, currently set at £325,000. 
In October 2007, Alistair Darling announced some significant changes to the laws surrounding Inheritance Tax (IHT). He has raised the threshold to £624,000 for married couples and those in civil partnerships. However, the threshold for single or divorced people remained at £312,000, rising to £350,000 by 2010. Previous to this, every individual had a £312,000 Nil Rate band; however, married couples had to ensure they had sufficient wills in place in order to use both Nil Rate Bands.
Despite the change, those people that are single, divorced or living with siblings will only have a £312,000 threshold, now £325,000.
3 - Property charged to Inheritance Tax on death includes not only property owned at death, but also certain gifts made during the last seven years immediately preceding the death, and may also include any benefit received by the deceased during the deceased's lifetime under certain types of trust.
4 - If the deceased was domiciled in the UK, the liability to Inheritance Tax applies to worldwide assets. In the case of persons who are not domiciled in the UK, it is limited to assets in the UK
This website does not deal with tax issues in detail and professional advice should always be taken. Michael Rhodes Legal Services will be pleased to look into your own personal circumstances in detail, and for this an appointment in our offices is always necessary.
