Keeping it simple
Currently the Inheritance Tax (IHT) rate is 0% on the first £263,000 (the nil-rate band allowance) you leave, but assets over this amount are currently taxed at 40% unless they pass to your surviving spouse. So, for example, if your estate is valued at £2,000,000 and you have made no previous gifts, no IHT is payable on the first £263,000. But, the remaining £1,737,000 is charged at 40%– producing a £694,800 tax bill. Who would have to pay this?
Do the sums
If you think that your estate could have a potential IHT liability, the first step is to talk to us – you are probably far wealthier than you imagine. Take a few minutes to calculate the potential tax bill your estate could be liable to! Please note that this will give you an indication of the potential IHT liability on your estate.
What is the value of your estate?
| Value of: |
Your home (and contents)
Your business *
Bank/savings account(s) Stocks and shares
Other investments, such as ISAs, EISs *, VCTs, PEPs, unit and investment trusts, OEICs Insurance policies (not written in trust)
Car(s)
Jewellery
Other assets |
|
| Total assets (a) |
£ |
|
| Deduct: |
£ |
|
| Mortgage |
£ |
|
| Loans |
£ |
|
| Other debts |
£ |
|
| Total liabilities (b) |
£ |
|
| Net value of your assets (a) – (b) |
£ |
|
Add:
Non-exempt gifts made in the last 7 years** |
£ |
|
Deduct
Nil-rate band |
|
-£263.000 |
| Taxable estate |
|
£ |
| Tax at 40% is |
|
£ |
| |
Key
ISAs – Individual Savings Accounts
EISs – Enterprise Investment Schemes
VCTs – Venture Capital Trusts
PEPs – Personal Equity Plans
OEICs – Open Ended Investment Contracts |
* You may be eligible for 100% relief on your business property or, less commonly, 50%. EIS shares normally count as business property for these purposes.
** Chargeable and potentially exempt transfers |
|
