• Inheritance Tax (IHT) is levied on the net value of everything owned at the time of death, including the main residence, any second property, cash savings and investments, cars, boats, personal effects (like jewellery) plus the value of any life assurance policies. Any debts owed are deducted.
  
  
• The inheritance tax Nil Rate Band threshold (currently £312,000 for 2008-2009 tax year) is the amount above which inheritance tax becomes payable. This threshold tends to change regularly in government annual budgets and will rise in stages to £350,000 in 2010/11.
  
  
• If the estate, including any assets held in trust and gifts made within seven years of death, is less than the threshold, no inheritance tax will be due. Certain other gifts like wedding gifts and gifts to charity are also exempt.
  
  
• There are some exceptions like passing the estate to your husband, wife or civil partner.
  
  
• Inheritance tax can dramatically reduce the value of an estate, so charitable gifts can often be made with little effect on the value of the estate left to other beneficiaries.
  
  
• Without IHT planning your family could be faced with a very large tax liability when you die, meaning they won't benefit as much as they should - but the government will!
  

• If the first deceased member of a married couple did not use all of their Nil Rate Band allowance then the unused proportion can be claimed by the executors of the estate of their widow(er) – thus effectively doubling the individual threshold.
  
  
• These new rules only apply to those legally married (or in a civil partnership) at the time of the first death.
  
  
• It doesn't matter how long ago the first death occurred, but the second death has to be on or after 9th October 2007 for the executors to be able to go back and make the claim for the unused portion.
  
  
• Should the widow(er) marry again at some point, the unused portion can still be claimed – but to achieve the most effective use of the NRB allowances both members of the new couple should not leave everything to each other but should consult their Will writer about making more sophisticated Wills.
  
  
• If someone is unfortunate enough to be widowed multiple times their executors can claim multiple partial NRBs as available – but to a maximum of one full extra NRB.
  
  
• If you simply live together the rules do not apply. If you were divorced before your ex-spouse died then there is also no benefit.
  

Inheritance tax is not just a tax on the very wealthy. Recent rises in property values and increased personal wealth mean that many more people own assets which are (or will be) valued well above the NRB threshold.

Good Inheritance Tax planning can often reduce the tax burden significantly.

Why pay more Inheritance Tax than necessary? As Independent Financial Advisors Cheltenham Wills can provide expert Estate Planning advice.