Effective estate planning could help you reduce the amount of inheritance tax due when your wealth passes on to your beneficiaries.
The threshold for inheritance tax is £325,000. This means your beneficiaries will pay 40% inheritance tax on any parts of your estate that are above the value of £325,000.
For example, if your estate is worth £425,000, you'll pay inheritance tax on £100,000. At a rate of 40%, you'll pay £40,000 in inheritance tax.
That's why planning how you'll pass your wealth to your beneficiaries, both during your life and after your passing is so important. It ensures those you care about get the most from your estate's worth.