Inheritance Tax

A tax of 40% of your estate if the total value of your estate, and gifts made in the previous seven years, exceed a set threshold. The 2013-14 threshold is set at £325,000. Charitable donations can qualify the entire estate for a reduced rate, currently set at 36%. Married couples and civil partners can transfer the threshold to themselves, meaning that upon the death of the second partner the threshold is double the main rate. Inheritance tax is typically paid by the Will executor from the assets of the estate.