Inheritance Tax
Probate and Inheritance Tax Explained
Inheritance Tax (IHT) is one of the most misunderstood aspects of probate. Many people assume it is a straightforward percentage applied to everything a person owns. In reality, the rules around what is taxable, what is exempt, and what allowances apply make IHT one of the more complex areas of UK tax.
What is Inheritance Tax?
Inheritance Tax is a tax on the value of a deceased person’s estate above a certain threshold. The current standard rate is 40% on the portion of the estate that exceeds the applicable nil rate band. Most estates do not end up paying Inheritance Tax.
The Inheritance Tax threshold: the nil rate band
Every individual has a nil rate band of £325,000. This is the amount that can pass free of IHT. The nil rate band has remained at this level since 2009 and is frozen until at least April 2030.
The Residence Nil Rate Band
An additional allowance of up to £175,000 is available where a residential property is left to a direct descendant such as a child or grandchild. This is the Residence Nil Rate Band (RNRB). Combined with the standard nil rate band, individuals may be able to pass up to £500,000 free of IHT where a qualifying property is involved.
Transferring allowances between spouses
When a married person or civil partner dies and leaves everything to their surviving spouse, no IHT is due. Any unused nil rate band and RNRB can be transferred to the surviving spouse’s estate, potentially doubling the allowances available on the second death.
Gifts and the seven-year rule
Gifts made during the deceased’s lifetime may be relevant to the IHT calculation. Some gifts are exempt regardless of when they were made. Others are potentially exempt transfers (PETs) and fall outside the estate only if the person who made them survived for seven full years afterwards.
Which HMRC form is required?
For deaths on or after 1 January 2022, most estates going through probate will need to complete the IHT400, regardless of whether IHT is actually due. The IHT400 is accompanied by supplementary schedules covering specific categories of assets and specific exemptions or reliefs.
How does YouCanDoProbate handle IHT?
As you enter information about the estate, YouCanDoProbate performs every calculation, determines which exemptions and reliefs apply, and populates every relevant section of the IHT400 and its schedules. The platform was independently assessed by the ICAEW to confirm its accuracy and compliance. You supply the facts; the platform applies the rules.
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Questions were easy to read – specified what information was required. Showed what forms needed to be completed re inheritance tax and how to calculate it etc. Am dealing with a simple estate but was worth the cost for peace of mind – especially when I’ve read people pay solicitors thousands of pounds for the same service
I was so happy I found YouCanDoProbate. I did not even know where to start with this process but as soon as you register with them on line (and pay the fee) it guides you through step by step. You then just print off the the forms and send them off. It made a complicated system really simple for us.
Provided clear and precise instructions as to what needs to be done. Made a complex process straight forward, especially for relatively simple estates.
I came across YouCanDoProbate whilst whilst scanning to get a company to help me do probate myself. At first I was surprised that this service was a fraction of the price that I had come across previously. What a great move to choose YCDP A great friendly and professional service. Got through our Probate with ease and total support. We had Tom supporting us. Such a terrific service, and great value Highly recommended Thank you
Easy platform to navigate, all the totals are done on auto can not fault in any way, once probate and HMRC code completed the grant was issued in less than three weeks.
Highly recommend this company. The intuitive software is easy to use and the friendly and professional telephone support is excellent. On the advise of the team I posted off my documents as I had considered using the government online form assuming it may be quicker! However Probate was granted in 15 days from when I posted my documents. Thank you to all the team at You Can Do Probate for making a stressful and emotional task much easier to navigate without the need of expensive solicitors! Nb The only improvement that I feel would be beneficial is the function to print the breakdown of all the values and calculations
System was priced sensibly and easy to use
Easy to do. Help always available. And it costs a lot less than solicitors. Excellent service.
As it says; “You can do Probate” all be it with a little help from the team who are really great. I had my doubts initially but I have managed to complete all of the forms and get my application in for my Mothers estate, and I am in my 70S. It was interesting that funeral expenses are an expense rather than a liability but I suppose if we think about it, it is. Many thanks to the team. I can just wait and see how long it takes to get it from here.
You can do probate is an excellent website, you can ring, email them and they answered my questions when I was not sure of the questions, we applied for probate in April and was granted second week in July. Thanks to everyone at You can do Probate. Use this site and you can save thousands of pounds.
I wanted to have a go at doing probate myself but did not have the confidence to go it alone. This platform was the perfect compromise and saved us thousands in Solicitors fees. I work as a Digital Project Manager so I am computer literate, but I can confirm the platform is very user friendly and intuitive for anyone to use. I phoned the helpline once for advice and they called me back within 24 hours with helpful and friendly guidance. It was not an ‘accepted estate’ and there were several exemptions to be submitted. You Can Do Probate handled this with ease. After using the platform to generate the first set of estate summary forms for HMRC I received confirmation from them within 11 days of posting. I then printed and submitted the probate forms to HM Courts. It took 9 days to receive an approval email and the Certificate of Probate arrived in the post the next day. So from start to finish – 20 working days. We were shocked at the speed! I would highly recommend You Can Do Probate. Absolutely worth the purchase fee. Thank you for making a really difficult time a little easier to navigate.
I was bit hesitant about using them, but OMG im so glad I made initial contact with them, they were so helpful, they answer my questions & put me @ ease, solicitors quoted thousands to do it for me, so I took the plunge, had forms to fill out & if u had any questions they were only a phone call away definitely 10/10
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