Inheritance tax is around 40-50 per cent, and just adds another terrible thing to think about at a very hard time.  As well as having to cope with the loss of a loved one, perhaps a parent or grandparent, there are legal implications of somebody dying too.

Here's what you need to know about inheritance tax

1.    Inheritance tax must be paid by individuals or families who have inherited something following a death.

2.    This tax is also known as death duty, and is only paid on the items inherited, rather than the whole value of the estate at the time of death.

3.    Inheritance and estate tax are not the same.  Estate tax is concerned with the value of the estate as a whole, and inheritance tax is only payable on items that have been inherited to an individual or a family.

4.    Anything that is valuable, such as property jewellery, antiques and other collectible items as well as any investments and insurance policies are subject to this tax

5.    The good news is that only inheritances worth £325 000 or more are subject to tax.  However, with houses worth a lot more than when they were bought, especially if they were bought by grandparents a long time ago for example, or houses in major cities such as London, it is very easy to reach this threshold.

6.    There are ways, however, of minimising the amount of tax payable, or and it's even possible to be legally exempt from paying tax on inheritances. 

7.    One of the ways is if the inheritor lived abroad for 3 years in a 20 year period.  Perhaps because many people are choosing to live abroad where the cost of living is lower, and the weather is better, more people will be exempt from paying this tax in the future.

8.    If the assets are overseas then inheritance tax is not payable.  With people having property abroad or living in different countries, or having foreign bank accounts, this is not as unlikely as it may first seem.

9.    There is no tax payable if a property is handed down 7 years before death.  Perhaps if you know that your parents or grandparents are getting older and frailer, or have medical conditions, and they don't want their home to be sold to pay off inheritance tax, then they might consider handing it down sooner they intended to.

10.    There are also other ways to avoid having to pay the vast amounts of inheritance tax, and to ensure that items can stay in the family at this very difficult time.  An experienced inheritance tax solicitor or financial advisor will be able to advise you based on your own circumstances.

Now you know a bit more about what happens after the death of a loved one, perhaps now is the time for you to think more about inheritance tax.