Inheritance tax is a tax on the estate of someone who has died. An estate can be made up of property, money and possessions. There’s normally no inheritance tax to pay if either the value of the estate is below £325,000 or if everything above that amount is left to your spouse, civil partner, a charity or a community amateur sports club. If you own your home (or a share in it) your tax-free threshold can increase to £500,000 if: you leave it to your children (including adopted, foster or stepchildren) or grandchildren your estate is worth less than £2 million Funds from the estate are used to pay inheritance tax. The people who inherit your estate only pay inheritance tax under specific circumstances, for example, if they inherit a rental property, or you give them a gift worth more than £325,000 and die within 7 years. Note: Farewill does not provide legal or tax advice. Our will specialists can provide you with guidance through our telephone service but we do not provide bespoke advice. If you would like inheritance tax advice before you write your will, we always recommend speaking to an independent financial advisor.