--- title: "Inheritance Tax | Pensions Advice UK" url: https://pensionsadviceuk.com/inheritance-tax/ description: "Minimising the impact of on your estate. The latest Inheritance Tax (IHT) statistics show an additional 4% was added to HM Revenue & Customs receipts…" last_updated: 2022-06-10 publisher: "Pensions Advice UK (a trading name of GAP-GNX Ltd)" language: en-GB --- Guide # Inheritance Tax Minimising the impact of on your estate Last updated 10 June 2022 **Written June 2022.** Tax allowances, limits and pension rules may have changed since then, so some figures here could be out of date. For current information, see our guide to [pensions and Inheritance Tax from April 2027](https://pensionsadviceuk.com/pension-inheritance-tax-the-2027-changes/). The latest Inheritance Tax (IHT) statistics show an additional 4% was added to HM Revenue & Customs receipts compared to the previous year[1]. IHT is a tax payable when you die. Whether your beneficiaries have to pay it, and how much they’ll pay, is based on the value of your estate. Your estate’s value is the value of the whole entirety of your assets. An asset is anything of value that is owned, for example; money, property, investments, businesses, possessions, payouts from life assurance not written under an appropriate trust, as well as any gifts made within seven years of your death. IHT is currently applied to estates worth more than £325,000, and will remain at this level until April 2026. **Update, November 2026:** The £325,000 nil-rate band and the £175,000 residence nil-rate band are now frozen until April 2031. From 6 April 2027, most unused pensions will also count towards an estate for Inheritance Tax. See [pensions and Inheritance Tax from April 2027](https://pensionsadviceuk.com/pension-inheritance-tax-the-2027-changes/). ## Surviving spouse When the value of your estate exceeds this limit, known as the ‘nil-rate band’, everything over the threshold is taxed at 40% (unless you’re leaving it to your surviving spouse, in which case no IHT needs to be paid). For the 2021/2022 tax year, there is also a ‘residence nil-rate band’ currently worth £175,000. If applicable to your particular situation, this is added to your nil-rate band of £325,000 – so your estate could be worth up to £500,000 before any IHT is payable. ## Emotional times This increased tax take suggests that the Chancellor’s freeze on the nil-rate band and residence nil-rate band at the last Budget is beginning to have the desired effect. It is achieving the ‘fiscal drag’ it set out to do, particularly given asset prices have soared following the depths of the pandemic and could continue to do so given inflation is on the up. As a result, many more people could end up having to pay IHT without realising they would fall into the tax charge. It is vitally important people start to have conversations with loved ones to fully understand an estate and the value of it. While it isn’t always the most pleasant conversation, it is better to have it now than during more emotional times such as following a death. ## Complicated tax With the government looking for ways to plug the holes in the public finances created by the pandemic, IHT will always be in focus. IHT is a complicated tax and one that requires a necessary level of knowledge to ensure your planning in the most tax-efficient way. So IHT planning should be a considered but it’s important not to plan in isolation – it should be part of an overall strategy that encompasses your lifetime financial goals and assets, even though constituent parts may be executed separately and at different times. **Source data:** *[1] National Statistics Inheritance Tax statistics: commentary from HM Revenue & Customs updated 29 July 2021.* INFORMATION IS BASED ON OUR CURRENT UNDERSTANDING OF TAXATION LEGISLATION AND REGULATIONS. ANY LEVELS AND BASES OF, AND RELIEFS FROM, TAXATION ARE SUBJECT TO CHANGE. THE VALUE OF INVESTMENTS AND INCOME FROM THEM MAY GO DOWN. YOU MAY NOT GET BACK THE ORIGINAL AMOUNT INVESTED. PAST PERFORMANCE IS NOT A RELIABLE INDICATOR OF FUTURE PERFORMANCE. THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE TAXATION & TRUST ADVICE. ### Would you like to speak to an adviser? Tell us what you need help with and we’ll introduce you to an FCA-authorised adviser. It’s free to enquire. [Get started](https://pensionsadviceuk.com/qualified-advice-request/) ### Important information This content is for information only and should not be considered legal, tax or financial advice. Pensions Advice UK is a trading name of GAP-GNX Ltd. We are not authorised by the Financial Conduct Authority and act solely as an introducer. The value of pensions and investments can fall as well as rise, and you may get back less than you put in. Tax rules can change and depend on your circumstances. ## Speak to an FCA-authorised adviser Tell us what you need help with and we’ll introduce you to a qualified specialist. Start your enquiry 020 3778 0939 We’re an introducer, not an adviser. [Call us](tel:+442037780939) [Enquire](https://pensionsadviceuk.com/qualified-advice-request/) --- Pensions Advice UK (a trading name of GAP-GNX Ltd) connects UK residents with FCA-authorised pension advisers and pension tracing services. It is not FCA-authorised and does not give financial or tax advice. It acts solely as an introducer to FCA-authorised firms, who provide any advice and explain any fees before you proceed. This is the text version of https://pensionsadviceuk.com/inheritance-tax/. More pages: https://pensionsadviceuk.com/llms.txt