Inheritance Tax is a tax on the estate of someone who has died, including all property, possessions and money. The standard Inheritance Tax rate in the UK is 40%, charged on the part of the estate above the tax-free threshold, currently £325,000.

Being "Domiciled" in the UK typically refers to the country that a person treats as their permanent home and has a substantial connection with. When it comes to IHT, being UK-domiciled means your worldwide assets could be subject to UK Inheritance Tax.

A non-domiciled individual in the UK is someone who has a permanent home ('domicile') outside the UK. Non-domiciled UK residents are only liable to pay UK Inheritance Tax on their UK assets.

An asset refers to any form of property, money, or possession that has value. In the context of IHT, assets include but are not limited to properties, vehicles, investments, savings, and personal belongings.

The Nil Rate Band (NRB), also known as the Inheritance Tax threshold, is the amount up to which an estate will have no IHT to pay. As of my last training data in September 2021, the NRB is £325,000.

The annual Gift Allowance is a tax-free allowance on gifts given during the tax year. As of my last training data in September 2021, you can give away up to £3,000 per year in total, and this amount won't form part of your estate when it comes to calculating IHT.

A Gift with Reservation of Benefit occurs when an individual gives away an asset but continues to benefit from it. For example, giving away your home but continuing to live in it rent-free. Such a gift might still be subject to IHT.

A Potentially Exempt Transfer (PET) is a gift that will be exempt from IHT if the giver survives for seven years after making the gift. If they do not, the PET becomes a Chargeable Consideration, and IHT may be due.

Inheritance Tax Taper Relief can reduce the amount of IHT due on gifts given away during your lifetime if these gifts become taxable and were given over three years prior to the donor's death. The relief starts after three years and increases each year until year seven, after which there is no IHT due on the gift.

The term 'intestate' is used when a person dies without having made a valid will. This means that the distribution of their estate may be subject to certain legal rules known as intestacy rules.

A Simple Will is a legal document that states who will inherit a person's estate after they die. This includes specifying how assets are to be distributed and naming an executor to handle the estate's administration.

A Testamentary Will, more commonly referred to simply as a will, is a legal document that allows a person to specify how their assets will be distributed after their death. It can also contain information about guardianship for minor children and instructions for personal wishes.

Trusts are legal arrangements where one or more 'trustees' are made responsible for holding assets—be it property, investments, or cash—for the benefit of one or more 'beneficiaries'. Trusts can be used as part of an estate planning strategy to manage wealth, protect assets and reduce Inheritance Tax.

Lifetime Direct Beneficiaries are individuals or entities, such as charities, that you choose to give gifts to during your lifetime. These gifts could potentially reduce the value of your estate and therefore the Inheritance Tax that may be due on your death.

A Gift into Discretionary Trust is when assets are transferred into a trust where the trustees have discretion over how to use the trust's income or capital. While such a gift can remove assets from your estate, it might also trigger a chargeable lifetime transfer, potentially subject to IHT.

An Interest in Possession Trust is a type of trust where the beneficiary, known as the 'life tenant', has the right to enjoy the income or property held in the trust during their lifetime. After their death, the assets go to other beneficiaries, known as 'remaindermen'. 

A Gift into Loan Trust is a trust-based arrangement where you make a loan to the trust which remains repayable on demand. Any growth on the assets within the trust would be outside of your estate for Inheritance Tax purposes, although the original loan value forms part of your estate.

Business Relief (BR) Investments are investments in certain types of businesses that qualify for Business Relief, a relief from Inheritance Tax. If held for at least two years, these investments can be passed on free from IHT upon death. This can be a valuable estate planning tool but does involve investment risk.