Inheritance Tax is due on your estate only if it's valued over the current Inheritance Tax threshold or nil rate band. Your estate value also includes any assets held in trust and gifts made within seven years of death. The tax is payable at a rate of 40% on the amount over the threshold, but not everyone pays Inheritance Tax as most estates are valued below the threshold.

If you're a married couple or civil partners, you can increase the threshold on the estate when the second partner dies. For further information on how to transfer an unused Inheritance Tax threshold, please visit HMRC.

Should your estate be liable to Inheritance Tax, you could choose to include a gift to charity and reduce the amount due. The value of a gift will be deducted from your estate before Inheritance Tax is worked out.

Changes to Inheritance Tax laws which were introduced in 2012 now mean that gifts to charity of 10% or more of your estate will benefit from reduced Inheritance Tax rate (from 40% to 36%).

For further information, please visit HMRC.