Inheritance TaxThinking about Inheritance Tax can be quite a dull subject. Inheritance Tax is the tax on the estate (property, money and possessions) of a deceased person. If your estate is under the current threshold of £325,000 – this means that your estate will not incur Inheritance Tax.
Married couples are also able to pass on their unused tax-free allowance to their spouse. So if the husband dies and his estate was under the threshold of £325,000 – his wife would be able to take his allowance and add this to her own tax-free allowance. This then means when the wife dies, her estate will only incur Inheritance Tax if it is worth more than £650,000.
Who is responsible for paying Inheritance Tax?
It is the Executor of the Will who would normally pay any Inheritance Tax that has been incurred on the estate. However, if no Will has been made it is the role of the administrator of the estate to do this. Inheritance Tax is usually paid within six months after the person’s death.
How is Inheritance Tax calculated?
If the estate is above the threshold (£325,000), the tax rate is 40%.
Value of estate
Amount of taxable estate
Amount of tax due
To work out how much Inheritance Tax is owed, you need to work out the value of the estate.
If you have been appointed as an Executor for a Will and require assistance with Inheritance Tax or any other duties, please feel free to contact us on 0800 1223 104 and we can help point you in the right direction.