It may be that the estate – such as the property, money, and possessions – of a person is subject to Inheritance Tax. Normally, there’s no Inheritance Tax to pay if the value of the estate is below the £325,000 threshold. Alternatively, it may not be payable if one leaves everything above this threshold to their spouse, civil partner, a charity, or a community amateur sports club. It’s also possible to increase one’s threshold – such as by giving their home to their children or grandchildren, or if a deceased spouse or civil partner had any unused threshold which can be transferred.
The standard Inheritance Tax rate is 40 per cent, and this is only charged on portions above the threshold.
Inheritance Tax is paid to HM Revenue and Customs (HMRC).
It should be paid by the end of the sixth month after the person has died.
That said, there are different due dates if a person is making payments on a trust.
If the tax is not paid by the due date, HMRC will charge interest.
So, how does one go about paying an Inheritance Tax bill?
This can be done using online or telephone banking, using CHAPS or Bacs, at the bank or building society, or by cheque through the post.
The government website explains that the money can be claimed back from the deceased person’s estate or the beneficiaries, once one gets a “grant of representation”.
This is also known as “probate”, and called “confirmation” in Scotland.
It’s possible to pay from accounts owned by the deceased, or by using National Savings and Investments (NS&I) and government stock owned by the deceased.