Valuing an estate and checking Inheritance Tax

Make an asset and debt record

Identify property, accounts, investments, possessions, mortgages, loans and other liabilities. Keep the date-of-death figures and the evidence supporting them. Ask about gifts, trusts and overseas interests rather than assuming the probate asset list gives the complete tax picture.

Allowances are not the same in every estate

The standard nil-rate band is £325,000 and the standard tax rate is 40% on the taxable amount above available allowances. Spouse or civil-partner exemptions, charity gifts, transferable allowances and the residence nil-rate band may change the calculation, subject to their conditions.

Do not assume every estate has a £1 million allowance. Residence history, earlier gifts, the destination of a home and the size or type of the estate can require specialist advice. Use the rules applying to the date of death.

Reporting and payment deadlines differ

Where full reporting is needed, IHT400 and the relevant schedules are used. HMRC says a taxable estate must be reported within one year of death. Inheritance Tax is normally due by the end of the sixth month after death, after which interest may arise.

Some payment arrangements depend on the assets involved. Do not wait for the probate grant before checking the tax position or asking how payment can be funded. The probate application may need HMRC’s code after the account is processed.

Useful preparation

Keep a single list of institutions contacted, valuations received, missing information and the dates of requests. If a figure is provisional, identify it clearly. A practitioner can then see the gaps and explain which valuations or tax calculations need further work.