Everyone has an Inheritance Tax threshold of £325,000. This means no tax is payable on the first £325,000 left in someone’s estate.
In addition, no Inheritance Tax is payable on anything left to your spouse or civil partner. Any unused portion of your £325,000 allowance can be transferred to their estate when then die. This gives their estate a potential threshold of £650,000, meaning that Inheritance Tax is only payable on the portion of the estate above £650,000.
If you leave a property to your children or grandchildren, there is an additional allowance of £175,000 for each spouse or civil partner. This makes a total potential Inheritance Tax threshold of £1 million for a married couple.