HMRC tool: Check if you might need to pay Inheritance Tax

HMRC have released a new tool ‘Check if you might need to pay Inheritance Tax’ to allow those dealing with deceased estates to work out the approximate value of the estate to help decide whether any Inheritance Tax (IHT) is likely to be due or not.

This is a freeview 'At a glance' guide to HMRC's new Inheritance Tax checker tool.

The tool does not calculate the potential IHT liability or send any information about the estate to HMRC. It also does not take into account any potential reliefs such as Business Property Relief (BPR) or Agricultural Property Relief (APR).

The tool does deal with:

• Whether or not any Transferable Nil Rate Band is available from a previously deceased spouse or civil partner.
• Whether the Main Residence Nil Rate Band (RNRB) is available to the deceased, but not whether there is any transferable RNRB available.
• Whether any Potentially Exempt Transfers (PETs) were made in the seven years prior to death or any Gifts with reservation of benefit which need to be brought into the death estate.
• Any entitlement to assets through a Life interest in a trust.
• Gifts to charity.
• Which Debts of the deceased can be deducted from the death estate.

Once completed, the tool also provides some helpful guidance from HMRC. The guidance includes what to do next with regard to the IHT forms that must be completed and applying for probate.

Useful guides on this topic

Client Briefing: Making gifts & IHT
What gifts can you make without triggering Inheritance Tax (IHT)? What are the rules on making tax-effective gifts for IHT purposes?

IHT: Estate planning checklist
This checklist covers some of the essential planning points that taxpayers should know when planning for their estate and Inheritance Tax (IHT).

Giving your home to your children
What are the tax implications of making a gift of your home to your children?

IHT: Normal Expenditure Out of Income (gifts)
When is Normal Expenditure out of Income exempt for Inheritance Tax (IHT)? How do you claim the exemption?

IHT: Transfers of value
What is a Transfer of value for Inheritance Tax (IHT) purposes?

Deed of variation
What is a deed of variation? When can a deed of variation be used? What are the requirements for a valid deed of variation?

External link

HMRC: Valuing the estate of someone who's died