Farra is a death administration assistant for UK families. Get step-by-step guidance for registering a death, applying for probate, notifying banks, and managing bereavement admin. From essential documents to practical checklists, Farra simplifies estate paperwork and funeral-related tasks so you can focus on what matters.
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Inheritance tax is 40% on estate value above £325,000 nil-rate band (frozen until 2030). Additional £175,000 residence nil-rate band if passing home to children/grandchildren (up to £500K total, £1M married couples). Exemptions: spouse/civil partner tax-free, charity gifts exempt. Gifts within 7 years taxable. Payment due before probate—HMRC allows 10-year installments for property.
Inheritance Tax (IHT) is a tax on the estate of someone who has died. Not all estates pay inheritance tax, but as an executor or administrator, you need to understand the basics to complete the necessary forms and determine if tax is due.
Significant inheritance tax changes are being introduced. See our Autumn Budget 2025 guide for the latest updates on what's changing for bereaved families.
Inheritance tax is only payable if the estate is worth more than the tax-free threshold. For 2026/26, the thresholds are:
These thresholds have been frozen since 2009 and will remain frozen until at least 2030. Learn more about the impact of frozen thresholds.
Several significant changes to inheritance tax are being introduced over the coming years:
For full details on all changes, see our Autumn Budget 2025 guide for bereaved families.
Inheritance tax can seem complicated, but many estates don't actually pay any tax. HMRC provides helpful guidance and there are professionals who can help with complex situations.
Focus on getting accurate valuations first - this will determine whether IHT is even payable and how much you might need to pay.
The inheritance tax threshold is £325,000 (nil-rate band). An additional residence nil-rate band of £175,000 applies when passing your family home to children or grandchildren, giving a combined maximum of £500,000 per person. Married couples can combine allowances for up to £1 million tax-free.
Inheritance tax is charged at 40% on the value of an estate above the tax-free threshold. The rate may be reduced to 36% if at least 10% of the estate is left to charity. There is no inheritance tax on gifts to spouses or civil partners.
Yes, inheritance tax must usually be paid before probate is granted. You need to pay any IHT due within 6 months of the death. However, you can pay in instalments over 10 years for certain assets like property. Some banks will release funds directly to HMRC before probate to pay the tax bill.
Gifts made in the 7 years before death may be subject to inheritance tax. Gifts in the 3 years before death are taxed at the full 40% rate. Gifts made 3-7 years before death benefit from taper relief, reducing the tax rate gradually. Some gifts are exempt, including £3,000 annual gift allowance and small gifts under £250.
For estates worth less than £325,000 with no complications, you complete form IHT205 or IHT421. For estates exceeding the nil-rate band or with more complex assets, you must complete the full form IHT400 along with relevant supplementary pages. All forms must be submitted before applying for probate.
Yes, from April 2027, unused pension funds will be brought into the scope of inheritance tax. This is a major change announced in the Autumn Budget 2025. Previously, pensions could be passed on tax-free outside the estate, but this will no longer apply to deaths from April 2027 onwards.
The November 2025 Budget confirmed IHT changes. Learn what was announced, what the rumours got wrong, and what it means for bereaved families.
From April 2027, unused pension funds will be subject to inheritance tax. Learn what's changing and how it affects bereaved families.
From April 2026, Agricultural Property Relief is capped at £1 million. Learn how this affects family farms and what executors need to know.
How gifts before death are taxed, taper relief rates, exempt gifts, and what executors need to report on IHT forms.
The IHT nil-rate band has been frozen at £325,000 since 2009. Learn how fiscal drag affects estates and what it means for families.
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