Inheritance tax is a tax on the value of a deceased person’s estate, the money, property and possessions they leave behind.
Only a small percentage of estates are large enough to incur inheritance tax but all estate values must still be reported to HMRC as part of probate.
As an executor applying for probate, you will need to estimate the value of the estate of the person who has died.
You will need to contact organisations such as banks and utility suppliers to find out about the person’s assets and debts. For example, how much money is in the bank, what pensions or investments they had and what bills need to be paid.
Then you’ll be in a position to estimate the value of the deceased person’s property and possessions. You’ll need to make a list of all the things the person owned with monetary value, like property, vehicles, furniture and jewellery. A little research on the internet will give you an idea of the fair market value of each.
Check if they had a share of any jointly owned assets. Then you’ll be able to calculate the value of their assets.
Next, deduct any debts and liabilities. You then should also deduct the value of any assets or money passing to charity.
This is the figure to report to HMRC on the relevant inheritance tax form, either IHT205 or IHT 400.
There’s normally no Inheritance Tax to pay if either:
The threshold can increase to £500,000 if the person’s home was left to their children. In some cases the threshold can be up to £1,000,000.
The beauty of using YouCanDoProbate to prepare your probate application is that the application does all the calculations for you, and alerts you if inheritance tax is due.
It also generates and completes the correct probate and tax forms for you, ready to print and send to the probate office. You can re-generate the forms as many times as you need so you won’t need to panic if you need to make some changes.
Once you receive the Grant of Probate, you can begin distributing the assets according to the person’s will and YouCanDoProbate will help you calculate what each Beneficiary is entitled to.
YouCanDoProbate helps you get the numbers and forms correct, making applying for probate and fulfilling the wishes of the deceased person simple and efficient.