Helping you protect your wealth is an important part of what we do, and one thing is certain, you need to plan to protect your wealth from a potential Inheritance Tax (IHT) liability. Benjamin Franklin once said that \u2018nothing is certain but death and taxes\u2019, and thanks to IHT, they\u2019re not only certain, they\u2019re intrinsically linked. Once only the domain of the very wealthy, the wide-scale increase in home ownership and rising property values over the past decade have pushed many estates over the IHT threshold. However, in recent years we have also seen property price reductions.
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\nIHT applies to your entire worldwide estate, including your property, savings, car, furniture and personal effects. You should also consider all of your investments, pensions and life insurance policies and ensure that life polices are held in an appropriate trust so they do not add to the value of your estate.<\/p>\n
When valuing a deceased person\u2019s estate, you need to include assets (property, possessions and money) they owned at their death and certain assets they gave away during the seven years before they died. The valuation must accurately reflect what those assets would reasonably receive in the open market at the date of death.<\/p>\n
Valuing the deceased person\u2019s estate is one of the first things you need to do as the personal representative. You won\u2019t normally be able to take over management of their estate (called \u2018applying for probate\u2019 or sometimes \u2018applying for a grant of representation\/confirmation\u2019) until all or some of any IHT that is due has been paid.<\/p>\n
Valuation process<\/strong><\/p>\n This initially involves taking the value of all the assets owned by the deceased person, together with the value of:<\/p>\n – their share of any assets that they owned jointly with someone else – for example, a house that they owned with their partner Next, from the total value above, deduct everything that the deceased person owed, for example:<\/p>\n – any outstanding mortgages or other loans If the debts exceed the value of the assets owned by the person who has died, the difference cannot be set against the value of trust property included in the estate. Levels and bases of and reliefs from taxation are subject to change and their value depends on the individual circumstances of the investor. Thresholds, percentage rates and tax legislation may change in subsequent finance acts.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Valuing an estate for inheritance tax Helping you protect your wealth is an important part of what we do, and one thing is certain, you need to plan to protect your wealth from a potential Inheritance Tax (IHT) liability. Benjamin Franklin once said that \u2018nothing is certain but death and taxes\u2019, and thanks to IHT,… Read more »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"_links":{"self":[{"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/posts\/888"}],"collection":[{"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=888"}],"version-history":[{"count":0,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=\/wp\/v2\/posts\/888\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=888"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=888"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.suretyfp.com\/wordpress\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=888"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n– any assets that are held in a trust, from which they had the right to benefit
\n– any assets that they had given away, but in which they kept an interest \u2013 for instance, if they gave a house to their children but still lived in it rent-free
\n– certain assets that they gave away within the last seven years<\/p>\n
\n– unpaid bills
\n– funeral expenses<\/p>\n
\nThe value of all the assets, less the deductible debts, gives you the estate value. The threshold above which the value of the estate is taxed at 40 per cent is \u00a3325,000 for the 2010\/11 tax year.<\/p>\n