Inheritance Tax is a tax on the estate (the property, money and possessions) of someone who has passed away.
The standard Inheritance Tax rate is 40% (additional ￡175,000 allowance is given
from 2020). The UK inheritance tax allowance is £325,000.
Estate value £500,000
Inheritance tax-free allowance £325,000
Taxable inheritance £175,000
The Inheritance Tax charged will be 40% x £175,000.
The payable amount will be £70,000.
Note: If your property value is less than £325,000 (inheritance tax allowance) or
you leave your property to your spouse, there is no Inheritance Tax to pay.