Estimating how much liability you could leave behind for your loved ones

Usually the ‘executor’ of the Will or the ‘administrator’ of the estate pays Inheritance Tax using funds from the estate.

 

An executor is a person named in the Will to deal with the estate – there can be more than one. An administrator is the person who deals with the estate if there’s no Will.Trustees are responsible for paying IHT on trusts.

Married couples and registered civil partners are allowed to pass their possessions and assets to each other tax-free, and, since October 2007, the surviving partner is now allowed to use both tax-free allowances (providing one wasn’t used at the first death).

Gifts made within the last seven years are not included in the calculations but may be liable to IHT on a sliding scale.

The calculation for valuation of your estate is for your general information and use only and is not intended to address your particular requirements. It should not be relied upon in its entirety and shall not be deemed to be, or constitute, advice. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation.

If IHT is due on the estate, you would need to complete HM Revenue & Customs (HMRC) form IHT400. You may also need to send other forms at the same time.

If no IHT is due, you’ll need to complete form IHT205 to tell HMRC that no IHT is due on the estate.

You or your solicitor will need to send the forms with your application for probate (‘grant of representation’). This is called ‘confirmation’ in Scotland.

The grant of representation (confirmation) gives you the right to deal with the estate as the executor or administrator.

Deadline for paying Inheritance Tax

The executor of a Will or administrator of an estate usually has to pay IHT by the end of the sixth month after the person died. After this, the estate has to pay interest.

You can make early payments before you know what the estate owes. Interest isn’t due on this amount.

You can pay IHT in instalments over 10 years on things that may take time to sell, for example, property and some types of shares.

There are different deadlines for paying IHT on a trust.