Inheritance tax

glendam

I believe when my OH and I die we will be subject to pay this tax.
I also know I can leave money in a trust for children/grandchildren. Does this money have to come from income or can it come from a back account that is earning a small amount of interest at the moment.
Hopefully someone will understand what I mean.
TIA
glendam

xylophone

I believe when my OH and I die we will be subject to pay this tax.

This would depend on the value of your estate at death. Currently, you each have an IHT allowance of £325000 each - if each of you wills your whole estate to the other then on the death of the second to die, the whole £650,000 can be used.

In addition, the Chancellor has proposed a "family home allowance"

http://www.telegraph.co.uk/finance/personalfinance/tax/11742032/New-inheritance-tax-rules-we-answer-your-questions.html

I don't quite follow your question with regard to your grandchildren.

Do you mean that you wish to gift them monies out of capital/income now which will be held in trust for them?

Or that you and your spouse wish to set up will trusts?

Either way, you might be well advised to see a solicitor who is a member of STEP who will advise you on your wills and trusts.

http://www.step.org/member-directory