What are inheritance tax rules?
Inheritance tax is a form of death duty that is paid by your executors, the people who manage your will after your death. About 40,000 estates a year are subject to IHT. It is charged at 40% on all assets worth more than a certain amount – currently 312,000 – left behind when someone dies, although assets left to a spouse are exempt from the tax. The threshold above which the value of estates is taxed at 40% was 300,000 from April 2007. For the tax year 2008-2009 it rose to 312,000, in 2009-2010 it rises to 325,000, and in 2010-2011 to 350,000. In 2007 Chancellor Alistair Darling doubled the value of assets which couples can leave behind when they die without incurring IHT. Married couples and civil partners now have a combined threshold of 600,000, rising to 700,000 by 2010. This means that when the second partner dies, inheritance tax will not be charged on the first 600,000 of their estate, provided none of the allowance was used when the first partner died – if assets were left to
