One of my clients died several years ago, leaving their entire £600,000 estate to their son. Unfortunately, the son then died 25 months later, leaving their entire estate of £800,000, which included the entirety of the inherited amount, to their nephew.

I have completed the inheritance tax forms for each death and it has struck me that part of the ‘original’ £600,000 has now been subject to inheritance tax twice in just over two years, can anything be done about this?

Inheritance tax (IHT) is, broadly speaking, payable at 40% on the value of a person’s assets at their death, after deducting various reliefs and the nil rate band (currently £325,000).

IHT of £110,000 (ie, (£600,000 – £325,000) x 40%) should therefore have been payable on the first death, leaving a net inheritance of £490,000 passing to the son.

In