Whilst Paul makes some useful points, I do feel that a couple of them need further explanation, as they normally would not contribute to your estate.
Pension payments, and payments following 'death in service' are pretty universally outside your estate, because they are paid 'in Trust' to your survivor or beneficiaries. In other words, those payments never enter your estate. Payments from insurance policies, too, will not enter your estate as long as they have been written (or have been placed) 'in Trust'. If you are not sure, ask your financial adviser or insurance company - it is an easy task to put policies in trust, and your insurer will have the correct forms. There should be no charge for this.
Farmland, businesses and business property, as well as certain specified investments, are likely to have zero inheritance tax liability, or a reduced liability, as long as they have been owned long enough (just 2 years). This is known as 'Business Property Relief.'
Finally: investments. Yes, if you benefit from investments held within a Trust (ie you receive the income or rent, for example, but are not entitled to spend the investment itself other than reinvesting it within the Trust), then the value held within the Trust will form part of your estate for inheritance tax purposes. However you may have, a 'discounted gift scheme', which is a special Trust that allows you to invest capital and receive the benefits in the form of income. Such a Trust is a straightforward, mainstream and recognised financial tool, and it falls under the 7-year rule. In other words, if you take a discounted gift scheme and live for 7 or more years, then no IHT will be payable based upon the value held within the Trust; there are some potential immediate inheritance tax benefits when you create the Trust, but this is rather too big a subject to explain here.
Personal belongings -'chattels' of relatively low value are excluded from the computation. However, gifts to individuals (or into trusts) made within the 7 years before death do give rise to inheritance tax, on a sliding scale. Those gifts are known as 'potentially exempt transfers'. There are various small exemptions - an annual amount, and gifts on marriage of a child or grandchild, for example | 01.03.11 @ 19:27