What is IHT?
IHT is essentially a form of death duties – the tax charged on what you leave behind when you die. In some ways it’s a fee charged by the government for allowing you to leave at least some of your wealth to your heirs. Leaving aside questions over the appropriateness of this, the fact remains that it is there to tax at 40% the value of all the assets you leave behind on death apart from the first 250,000-worth. In practical terms, IHT has to be paid by someone’s executors before they are able to manage their assets and potentially hand them on to the beneficiaries. Calculating IHT The basic calculation of IHT is simple – value all the assets that are left behind on death, add them up, knock off 250,000 (the “nil rate band”, which increases a bit every year) and tax what’s left at 40%. There are some extra points to this calculation. For a start, if the deceased gave away assets within the seven years before death, those assets have to be counted into the value of the estate though any
