The first step is to identify the estate. This is all of the property which the deceased was beneficially entitled to. It could include gifts made, if the gift was made within the last 7 years of the deceased’s life.
The next step is to value the estate. This is the current market value of all the deceased’s assets
minus the funeral expenses and any debts.
You then apply any relevant exemptions, the most common of which are gifts to charity and
property passing to a surviving spouse.
The usual rule is that if the estate exceeds £325,000, Inheritance Tax (IHT) must be paid at 40%
above this figure, unless your spouse predeceased you and left all of their assets to you, in which
case IHT is payable at 40% on assets above £650,000 on the second death. Please note that in
addition to the usual rule, there are various exceptions. Please consult a solicitor for further advice.
Back to Estate & Tax Planning