Limitations of the Calculator

This calculator provides an estimate for individuals and doesn't account for:

• Taper on the residence nil-rate band: This affects estates exceeding £2 million.
• Exempt assets: Certain assets like specific shares may be exempt under special circumstances.
• Gifts Made Within Seven Years of Death: Gifts you make within seven years of your death are typically included in your estate for Inheritance Tax (IHT) purposes. This calculator focuses on your overall estate value, so it's important to consider the potential IHT implications of lifetime gifts.

For a more personalised assessment, consult a financial adviser.

What You Need to Know About Inheritance Tax (IHT)

The Basics

Inheritance tax (IHT) applies to the value of your assets left behind, including gifts made during your lifetime. Property, cash, investments, and valuables are all included. The current tax rate in the UK is 40% on anything above the £325,000 "nil-rate band" threshold.

Factors Affecting IHT

The amount owed depends on the estate value, beneficiaries, and any exemptions or reliefs used.

Strategies for Minimising Inheritance Tax Liability

Consult a Financial Adviser

Professional advice can offer personalised strategies like trusts, lifetime gifts, or other estate planning tactics.

Gift Exemptions

The UK offers various exemptions to reduce IHT, including:

• Annual exemption: Give away £3,000 annually without impacting your estate.
• Small gifts exemption: Give up to £250 per person per year (as long as you haven't used another exemption on them).
• Wedding/civil partnership gifts: Varying amounts depending on the recipient are exempt.
• Regular gifts from income: Gifts from your regular income that don't affect your standard of living may be exempt.

Advanced IHT Planning Tools

• Trusts: Placing assets in a trust can potentially reduce your estate's taxable value and control how assets are distributed.
• Charitable Contributions: Leaving at least 10% of your net estate to charity can lower the inheritance tax rate to 36%, saving money while supporting a cause.