Chapter 16 Inheritance tax - Death Estate

Question 1

What is included in the death estate?

What costs are allowed to be offset?

Answer 1

All assets owned by deceased
Less:
debts - e.g credit cards/taxes/funeral expenses

(Gambling debts not allowed)

Question 2

What assets are exempt from the Death Estate?

Answer 2

NONE

There are no exempt assets, only exempt legacies :-)

Question 3

How are shares listed on the stock exchange (quoted shares) valued for IHT purposes?

Answer 3

Valued at the lower of:
1. Quarter up:
Lower quoted price+1/4(higher-lower)

2. Average of lowest/highest marked bargains

Question 4

What happens when someone dies leaving unused nil rate band (NRB) and unused resident nil rate band (RNRB)?

Answer 4

The PERCENTAGE remaining transfers to their spouse to increase the band at the band rate in the relevant year when the 2nd spouse dies.

2nd spouse can use the ‘inherited nil bands’ in their death tax calculations.

No Spouse=loss of unused bands
#ifyoulikeitthenyoushouldhaveputaringonit

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Question 5

What conditions have to be met to claim the Residence nil rate band (RNRB)?

Answer 5

Residential property
Left to direct descendant on death
Must have been the home of the deceased at some point

Question 6

How much is included in the death estate for Life assurance policy

Answer 6

The total value if on the deceased life

The MV if on another person

Question 7

What is the limit of exempt transfers to a non uk domiciled spouse?

Answer 7

HARDMANS

£325000

Question 8

Chargeable Estate

Answer 8

BEFORE deducting NRBs

Question 9

QSR

Answer 9

tax paid on estate post nrb deduction

increase in estate of receiver / diminution in value of doner

Relevant %

Hardmans