Will I have to pay Inheritance Tax? If the total value of your estate (i.e. all of your assets, less any debts) at death is in excess of the allowance at the time, then Inheritance Tax (or IHT) will be payable on however much that excess is. The tax is paid from the assets of your estate before any gifts are paid out, so it can reduce the value of what is being left to your beneficiaries. The allowance (or “threshold”) before IHT needs to be paid is relatively high, and is being raised further over the next few years. You should seek advice on whether your estate may be liable for IHT – for many people, it may not be. However, if your estate is likely to be subject to IHT, then leaving a gift to charity may help to reduce the amount of tax otherwise payable. Registered charities such as St. Margaret’s Hospice are exempt from IHT, and any gifts to them may help to reduce (or sometimes reduce entirely) the amount of tax your estate would otherwise be liable for.