Brexit negotiations came to a close recently as Boris Johnson announced a trade deal had been agreed. While this deal is still being analysed, many have already begun to speculate on how financial assets such as pensions could be impacted in the coming years.
Where IHT is due, it will usually be levied at 40 percent.
However, it should be remembered that this 40 percent is only charged on the parts of the estate that are above £325,000.
So, for example, if an estate is worth £500,000, 40 percent will only be charged on £175,000 (£500,000 minus £325,000).
IHT itself can be lowered to 36 percent if 10 percent or more of the “net value” of the estate is left to charity in a will.
IHT bills must be paid by the end of the sixth month after a person’s death.
If it is not paid within this timeframe, HMRC will start adding interest to the debt.
According to the government, funds from an estate itself are usually used to pay the bill.
To ensure the debt is paid properly, families can seek out help from professional lawyers or administrators, who will be known as executors if there’s a will in place.