What is inheritance tax, who pays it and how are the rules changing?

Inheritance tax is charged at 40% on the property, possessions and money, external of somebody who has died, above a £325,000 threshold.

It is only charged on the part of the estate that lies above the threshold. For example, on an estate worth £335,000, the tax would apply to the additional £10,000.

The chancellor said this threshold will remain in place for an extra two years, until 2030.

Inheritance tax must be paid by the end of the sixth month after the person’s death, otherwise interest is charged too.

It currently raises about £7bn a year for the government.