The law allows you to leave an estate worth up to £300,000 without having to pay any Inheritance Tax upon it.   This £300,000 is called the “Nil Rate Band”.  After the first £300,000 of the Nil Rate Band the remainder of your estate will be charged at 40% Inheritance Tax.

The Nil Rate Band will increase to £325,000 in 2008 / 2009 and to £350,000 in tax year 2009 / 2010.

However from 9th October 2007 spouses and civil partners can transfer their Nil Rate Band allowance so that any part of the Nil Rate Band that was not used when the first spouse or civil partner died is transferred to the individual’s surviving spouse or civil partner for use on their death.

This transferable allowance is available to all survivors of a marriage or civil partnership who die on or after 9th October 2007 no matter when the first partner died.

If you require more information of how this will work for you then contact Essex Wills.