Why might my grandchildren pay 64% inheritance tax instead of 40%?
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The64% tax rate that I talk about is relevant when you leave money to your children and you haven't planned early enough or you die earlier than expected. You die and 40% IHT is payable on some or all of your estate.
Now, when that money is then passed from your children to your grandchildren, it's possible that your children will also have an inheritance tax bill. So the same money on which they've already paid 40% is taxable again at 40%.
So 40% of 40% is a net 64% of the original figure, and that's how we get to the 64% tax rate.
