What assets make up an estate?

If you’ve investigated how much inheritance tax (IHT) your loved ones are likely to pay when you die, you may be confused by what assets are subject to this levy. While you might understand that IHT must be paid on your estate, what is included may not always be clear.

After a death, the executors of a will calculate the total value of the deceased’s money, possession and properties, minus any debts. The sum after subtraction is referred to as a person’s “estate” and is liable to IHT.

What assets are included?

For IHT purposes, any assets of value, including an individual’s shares under joint ownership, are included in their estate. This includes investments, ISAs, shares, savings, property, vehicles and personal chattels, along with gifts given in the past seven years.

What assets are not included?

There are assets that fall outside of an estate that are not subject to IHT. This commonly includes life insurance that is held in trust, trusts generally and most pension plans.

When a person dies, their outstanding debts are repaid from their assets, often reducing the value of their estate. As a rule, funeral expenses are also an allowable deduction from the estate for IHT purposes.

Experts in IHT

Whether you have concerns regarding inheritance tax or need assistance with other aspects of estate and retirement planning, at Hartey Wealth Management, we can help. Our expert team of advisors covers all financial areas and can provide unbiased and expert guidance. Contact us today to discuss your needs.

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