Calculating the IHT charge on death


Published by a UUÂãÁÄÖ±²¥ Private Client expert
Practice notes

Calculating the IHT charge on death


Published by a UUÂãÁÄÖ±²¥ Private Client expert

Practice notes
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This Practice Note outlines how to calculate the amount of Inheritance tax (IHT) that arises on an individual’s Estate on death. For a broader explanation of the IHT charge on death, see Practice Note: IHT—the charge on death. For a worked example of an IHT calculation on death, see Practice Note: Case study—IHT calculation on death.

IHT charge on death

The IHT charge on an individual’s death falls under two headings:

  1. •

    the 'additional charge'—which can arise on chargeable lifetime transfers (CLTs) and potentially exempt transfers (PET) made by the deceased in the seven years before death, and

  2. •

    the 'estate charge'—which arises on the value of all the property the deceased owned (or was deemed to own) immediately before death

Additional charge on death

Additional IHT may be due on the death of the transferor on CLTs that have already suffered IHT at the lower lifetime rates.

Where the deceased has not survived seven years from the date of a PET, the failed PET is treated as a Chargeable transfer and IHT arises

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Inheritance tax definition
What does Inheritance tax mean?

Inheritance Tax is paid on an estate when somebody dies or when trusts or gifts are made during someone's lifetime.

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