Depending on its total value, inheritance tax may need to be paid on an individual’s estate when they die. In this blog we’ll take a closer look at how estates are valued to assess how much tax must be paid.
What is an estate comprised of?
An individual’s estate is made up many different assets. These typically include money held in bank accounts, land or properties, financial investments along with cars and smaller valuables like jewellery.
Calculating the value of an estate
Determining the value of an estate requires listing all assets possessed by the deceased and working out what their value is. After this figure is calculated, debts and liabilities can then be deducted. For example, outstanding loan or mortgage payments may be subtracted along with due utility bills and costs for a funeral.
Comprehensive records must be kept on how all calculations are conducted. The value of a person’s home when they pass away for instance, may be based on a professional property agent’s assessment.
These records are crucial and must be safely retained for at least 20 years in case HMRC needs to examine documentation. Cash gifts made before an individual dies must also be kept recorded unless they were bestowed seven or more years prior to death.
Experts in Inheritance tax
If you have concerns about inheritance tax, estate or retirement planning in Chester or Shropshire, we can help. Contact our team at Hartey Wealth Management, to access tax-efficient strategies that can lower how much tax is paid on an estate.
