If you are UK Domiciled* Inheritance tax is calculated on the value of your worldwide assets that you leave behind when you die. Additionally, any gifts made within the previous 14 years before death may need to be considered depending on the order of gifting and the use of trusts.
Your assets include your property, personal chattels, investments, even the change in your pocket! The good news is that everyone gets an inheritance allowance of £325,000 (your nil-rate band or ‘NRB’) and therefore not everyone will be liable to IHT.
There is also an additional allowance if you pass on your family home to direct descendants (the main residence nil rate band, MRNRB) and this could provide a further allowance of up to £175,000. The bad news is that if your estate is liable for Inheritance Tax on death this is charged at a massive 40% on the value of your estate over your allowances.
There is also an additional allowance if you pass on your family home to direct descendants (the main residence nil rate band, MRNRB) and this could provide a further allowance of up to £175,000. The bad news is that if your estate is liable for Inheritance Tax on death this is charged at a massive 40% on the value of your estate over your allowances.
If the asset is sold before all the IHT is paid, the executors of the estate must ensure that all instalments (and interest) are paid at that point.
We are Barrister Intermediaries:
Talk to our Inheritance & Capital Gains Tax Experts, partnered with a Specialist Barrister’s Chambers in London. Initial exploratory consultation is free and without Obligation.
