How does Inheritance Tax work?
Inheritance Tax is charged on the value of a person’s estate when they have died. There are strict deadlines in force for submission of an Inheritance Tax account and payment of tax to HM Revenue & Customs.
When calculating the estate’s liability to Inheritance Tax, you should take into account certain tax allowances, within which Inheritance Tax is not payable. These include:
- Nil rate band
- Transferable nil rate band
- Residence nil rate band
- Transferable residence nil rate band
In addition, there are a number of tax exemptions and reliefs, which can reduce an estate’s liability to Inheritance Tax. You may be entitled to claim these reliefs if, for example, the estate is passing to a certain person (such as a surviving spouse or charity) or the estate is made up of certain types of assets (such as business or agricultural property).
It is important to account promptly and accurately to HM Revenue & Customs, to avoid any unnecessary penalty or interest charges. Our experienced team are on hand to advise you of the tax position of the estate, and to complete the necessary returns and calculations for you.