An introduction to inheritance tax (IHT)

Copyright © 2026 LexisNexis
Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance

An introduction to inheritance tax (IHT)

Copyright © 2026 LexisNexis
Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
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This guidance note provides a background to the basic principles of IHT, including the loss to the donor principle, chargeable transfers and transfers that are not subject to inheritance tax.

Background to inheritance tax

Inheritance tax is a tax on the value passing from one individual to another person. This typically arises when an individual dies and all of the property that they own (their ‘estate’) passes to beneficiaries. An individual may also transfer their assets to others during lifetime. This could be an outright gift of assets to another person or a gift into trust.

Assets in trust are held by trustees for the benefit of others, whose entitlement to them is restricted in some way. Special inheritance tax rules apply to trusts to reflect the separation of legal and beneficial ownership.

IHT arising on a death estate is a tax on the donor ― the person who is transferring the asset. It is calculated with reference to their estate. It is not a tax on the beneficiaries,

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  • 11 Nov 2025 09:30

Home/ Tolley Tax Guidance/ Trusts and Inheritance Tax / Understanding the key concepts of IHT

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