Exemptions exist: estates valued under £325,000, assets left to spouses, certain charities, or sports clubs, and allowances for passing on a home to children or grandchildren. There's also the ability for married partners to share allowances.
The possibility of abolishing or reducing inheritance tax is uncertain. It generates around £7 billion annually for the government, and any changes could impact public services.
Gifting money can help reduce tax liability, with an annual exemption of £3,000. Larger gifts may affect tax calculations if given within seven years of the donor's death.
Trusts are another option to manage inheritance tax, but they involve complex rules and require careful consideration.
For detailed guidance, resources are available from HM Revenue and Customs and Moneyhelper.