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The estate is the wealth left behind by someone after they die. This includes everything from property to possessions to businesses to cash and more. It is split between those listed in the will of the deceased. And depending on the estate’s value, the beneficiaries might need to pay Inheritance Tax (IHT).
As we said, an estate can include things like property, land, cash, shares, jewellery, works of art, vintage cars etc. And in the same vein, debts are also carried over. They are deducted from the value of the estate after you die. Examples include:
Debts such as these reduce the value of the estate for Inheritance Tax purposes.
Beneficiaries of an estate don’t need to pay any Inheritance Tax in the following scenarios:
Take a look at the below example to calculate Inheritance Tax on an estate worth £400,000.
For an example of the journey you have to make when someone dies as a beneficiary, take a look at our blog, Lord of the Rings – and the tax return.
Or if you want to calculate IHT, head over to HMRC.