Inheritance Tax Calculator
You may feel happy if you use our Inheritance Tax Calculator and find out there no Inheritance Tax pay. However, you may be unhappy if there is Inheritance Tax to pay. Use, our Inheritance Tax calculator and find out the truth today.
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Inheritance Tax Calculator The Basics
Estimate the value of your estate and how much inheritance tax may be due when you die. Updated for the 2021-22 tax year and valid through to 5/4/2026.
Inheritance tax paid on what you leave behind to your heirs, and they could pay as much as 40% tax on what they inherit, after allowances.
The calculator is simple to use, it takes into account, estate debts, Nil Rate Band (NRB) Transferable Nil Rate Band (TNRB), Residence Nil Rate Band (RNRB), Transferable Residence Nil Rate Band (TRNRB), gifts in estates, and any previous probate for a spouse if required.
The Inheritance Tax calculator will also calculate the estate with 10% or more going to charity.
The calculations are accurate for any estate up to the value of £2,000,000
Also, check out Inheritance Tax Thresholds
Need help with Inheritance Tax?
Our friendly specialists are here to help you and can offer information and a free, no-obligation quote over the phone.
More About Inheritance Tax (IHT)
The good news is that there are lots of ways to cut down your bill, which we’ve explained in full in our guides to inheritance tax. But this calculator can help you estimate what potential inheritance tax bill your heirs might potentially have to pay.
Enter in your assets and any debts, and we’ll show you how much your estate is worth – and an estimate of how much could be subject to inheritance tax. The calculator has been updated with the inheritance tax allowances for the 2020-21 tax year. (IHT) is charged at 40 percent on the value of an estate that falls above a certain threshold if a person has passed away.
In the Budget, Chancellor Rishi Sunak announced Inheritance Tax thresholds would remain at current rates until 2026, over the next few years many estates that are not currently liable for Inheritance Tax (IHT) will fall into a liability. If you are currently close to the limits you may wish to look at creating a Living Trust.
Inheritance Tax Years
2020-2021
2021-2022
2022-2023
2023-2024
2024-2025
How To Use Our Inheritance Tax Calculator For Single or Divorced Status
Section 1: Gross and Net Estate
Type in the gross value of the estate in question, in the Inheritance Tax Calculator, for, “What is the estate value”. Please do not use commas or pence. Then type in the value of all the estate debts in the Inheritance Tax Calculator under, Estate Debts. Please do not use commas or pence. Then scroll down.
Section 2: Net Estate Value.
If the Inheritance Tax Calculator has not been updated, to include the debt simply click anywhere on panel 2 and it will automatically update. Then scroll down.
Section 3: Marital Status
Select the marital status of the deceased person in the Inheritance Tax Calculator you are completing a calculation for the question. What is the marital status of the deceased? If you are using this calculator for yourself, simply use your own marital status. Then scroll down.
Section 4: Estate Gifts
In the Inheritance Tax Calculator, first of all, look at the exemptions, then add up the value of any gifts made in the last 7 years. If there are no non-exempt gifts in the last 7 years, please leave this at zero and then scroll down.
Section 5: The Taxable Estate Minus Allowances
In this section of the Inheritance Tax Calculator, it will give you the value of the taxable estate after Nil Rate Band (NRB) and/or Transferable Nil Rate Band (TNRB). Please scroll down.
Section 6: Property
In the Inheritance Tax Calculator simply click yes or no to the question relating to the property. The answer to the maximum claiming Residence Nil Rate Band (RNRB) and Transferable Residence Nil Rate Band (TRNRB). The result will be below. Then scroll down.
Section 7: Estate Value Minus Residence Nil Rate Band
The Inheritance Tax Calculator will give you the value of the taxable estate after Residence Nil Rate Band has been accounted for. Then scroll down.
Section 8: The Estate Inheritance Tax Liability
The Inheritance Tax Calculator will calculate the Inheritance Tax Liability of the estate at 40% it will also calculate the estate value at 36% please select yes or no. The following questions are optional.
How To Use Our Inheritance Tax Calculator For Married Status
Section 1: Gross and Net Estate
Type in the gross value of the estate in question, in the Inheritance Tax Calculator, for, “What is the estate value”. Please do not use commas or pence. Then type in the value of all the estate debts in the Inheritance Tax Calculator under, Estate Debts. Please do not use commas or pence. Then scroll down.
Section 2: Net Estate Value.
If the Inheritance Tax Calculator has not been updated, to include the debt simply click anywhere on panel 2 and it will automatically update. Then scroll down.
Section 3: Marital Status
Select the marital status of the deceased person in the Inheritance Tax Calculator you are completing a calculation for the question. What is the marital status of the deceased? If you are using this calculator for yourself, simply use your own marital status. Read the results and follow the notes underneath the marital status.
The following questions are optional.
How To Use The Inheritance Tax Calculator for Widowed Status
Section 1: Gross and Net Estate
Type in the gross value of the estate in question, in the Inheritance Tax Calculator, for, “What is the estate value”. Please do not use commas or pence. Then type in the value of all the estate debts in the Inheritance Tax Calculator under, Estate Debts. Please do not use commas or pence. Then scroll down.
Section 2: Net Estate Value.
If the Inheritance Tax Calculator has not updated, to include the debt simply click anywhere on panel 2 and it will automatically update. Then scroll down.
Section 3: Marital Status
Select the marital status of the deceased person in the Inheritance Tax Calculator you are completing a calculation for question. What is the marital status of the deceased? If you are using this calculator for yourself, simply use your own marital status. Then scroll down.
Section 4: Estate Gifts
In the Inheritance Tax Calculator, first of all look at the exemptions, then add up the value of any gifts made in the last 7 years. If there are no non-exempt gifts in the last 7 years, please leave this at zero and then scroll down.
Section 5: The Taxable Estate Minus Allowances
In this section of the Inheritance Tax Calculator, it will give you the value of the taxable estate after Nil Rate Band (NRB) and/or Transferable Nil Rate Band (TNRB). Please scroll down.
Section 6: About the First Deceased of a Marriage or Civil Partnership
In the Inheritance Tax Calculator simply select, yes or no, if the answer is no scroll down to section 7 if the answer is yes, enter the amount gifted to other beneficiaries other than the deceased.
Section 7: The Estate Before Residence Nil Rate Band
The Inheritance Tax Calculator, will calculate the taxable estate before residence nil rate band.
Section 8: Property
In the Inheritance Tax Calculator simply click yes or no to the question relating to property. The answer to the maximum claiming Residence Nil Rate Band (RNRB) and Transferable Residence Nil Rate Band (TRNRB). The result will be below. Then scroll down.
Section 9: Estate Value Minus Residence Nil Rate Band
The Inheritance Tax Calculator will give you the value of the taxable estate after Residence Nil Rate Band has been accounted for. Then scroll down.
Section 10: The Estate Inheritance Tax Liability
The Inheritance Tax Calculator will calculate the Inheritance Tax Liability of the estate at 40% it will also calculate the estate value at 36% please select yes or no. The following questions are optional.
Inheritance Tax Calculator For Estates Below £2,000,000
About The Calculator
The calculator is for general guidance only and cannot be relied upon as fact It does not allow for every variable. If you want an accurate account of your Estate liabilities please contact us for a free discussion.
What is the inheritance tax threshold for married couples (or civil partner couples)?
The inheritance tax threshold for married couples (or civil partnerships) in the 2020/21 tax year is £325,000. However, this can be increased to £650,000 if one partner dies and leaves everything to the surviving partner. This is because spouses and civil partners inherit from each other tax-free, and they also inherit their partner’s unused inheritance tax allowance.
Does every estate have to pay inheritance tax?
The inheritance tax allowance doesn’t apply between spouses and civil partners who live in the UK. This means that, if the entire estate you’re dealing with has been left to the person’s spouse or civil partner, no inheritance tax will be owed – even if the estate is over £325,000.
Does everyone have the same inheritance tax threshold?
The short answer: no. It’s actually possible for many people to double their inheritance tax allowance to £650,000 and here’s how.
If someone who is married (or in a civil partnership) leaves their entire estate to their spouse, their unused inheritance tax allowance of £325,000 will also pass to their partner. This effectively doubles the surviving spouse’s inheritance tax threshold to £650,000. The same benefit also applies to people in a civil partnership.
This means that, if someone’s spouse or civil partner dies and leaves them their entire estate, the surviving partner’s inheritance tax allowance will effectively be £650,000.
Who pays inheritance tax?
If there is a will, the executor is legally responsible for paying the inheritance tax bill from the estate. If there isn’t a will, this is usually handled by the administrator who in turn is also legally responsible.
Figuring out exactly how much inheritance tax is due can be difficult, so many people choose to use a professional probate specialist when dealing with their loved one’s estate.
Once the amount of inheritance tax owed has been calculated, this can either be paid from funds within the estate, money from the sale of assets, or through the Direct Payment Scheme (DPS). This is where inheritance tax is paid directly from the bank or building society of the person who died.
How to avoid paying inheritance tax
You can avoid paying inheritance tax in a number of ways, including:
Leaving everything to a spouse or civil partner: married couples and civil partners can leave assets to one another without incurring inheritance tax.
Leaving property to children: homeowners get an extra £175,000 added to their inheritance tax allowance if they leave property to their children, step-children, or grandchildren, taking their total inheritance tax allowance to £500,000.
Leaving 10% of the estate to charity: if 10% of an estate is left to charity, the inheritance tax rate can be reduced from 40% to 36%, potentially cutting the amount of inheritance tax due by thousands.
If you’re dealing with someone’s estate and want to change their will to make it more tax-efficient, you could get a legal document called a deed of variation.
For more information on making your own will tax-efficient, please take a look at our free guide on how to avoid inheritance tax.
You can create a living trust, this will allow you to remove £325,000 from the estate every 7 years. A couple with a shared property or assets could also create a living trust each raising the amount to £650,00 however if you within the 7 years though it will be included in the estate as a gift. If you are young enough it is worthwhile considering a living trust especially in light of the freezing of the IHT allowances until 2026 as the property will still be going up in value.
When do you need to pay inheritance tax?
Inheritance tax ideally needs to be paid by the end of the sixth month after your loved one’s death. After this point, HMRC will start charging interest. They may also charge late payment penalties, which can be as high as £3,000 if the payment is more than 12 months late. It’s therefore important to apply for probate and gain access to the estate as quickly as possible.
How to fill out the required forms
The main form is called an IHT400, this form is a government form from HMRC that needs to be completed in England, Wales, and Scotland if the estate is liable for inheritance tax. This is a long, complex document with multiple sections for different types of assets, allowing you and HMRC to work out how much inheritance tax is due. The IHT400 form leads to a possible further 25 forms called schedules, which all need cross calculations with IHT400.
Please be aware that mistakes in the forms can cause, delays, interest charges and fines. None payment of Inheritance Tax is a significant problem which can cause you to be indebted to HMRC. Please see this story of an Administrator ordered to pay HMRC £340,000.
Unless you’re very familiar with tax forms and financial paperwork, IHT400 can be an extremely stressful and time-consuming form to fill out. For this reason, many people choose to use a professional probate specialist instead. contact us now on the details below or start your probate now online. If you would like an instant quote for probate try Probate Full Administration or Grant Only or get an Instant Quote using the buttons below.
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