⚠️ Hey, you are using an outdated web browser.
TaxScouts might not work with your browser. Upgrade here

Let us sort your Self Assessment online. £119, all in. Learn more


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).

What is the taxable value of an estate?

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.

When do I pay Inheritance Tax?

Beneficiaries of an estate don’t need to pay any Inheritance Tax in the following scenarios:

  • If the value of your estate is less than the £325,000 threshold (or £500,000 if you give away your home to children). This threshold can further increase to £1,000,000 for married couples or civil partners
  • If you leave everything above the £325,000 threshold to your spouse, civil partner, a charity, or a community amateur sports club

How to calculate the taxable value when someone dies

Take a look at the below example to calculate Inheritance Tax on an estate worth £400,000.

  • The deceased’s house is worth £400,000, and there are no other assets
  • There is an outstanding mortgage of £150,000
  • The estate’s value for IHT purposes is £250,000 – (£400,000 – £150,000)
  • This is under the IHT threshold, so there is no tax to pay

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.


Hey there! We really hope this article helped you. Tax matters can be a dreadful topic at times. We know. That's why we started TaxScouts.
A stress-free way to getting your taxes done.

Have a minute? See how it works

More guides & useful information

Related terms

Let us sort your Self Assessment online. £119, all in.

That’s right. No matter how complicated it gets or why you need to do a return in the first place, it’ll cost £119 to get it done. That includes VAT, last-minute changes and all the support you may need.

How TaxScouts works

Answer a few simple questions

And we mean a few. After a couple of minutes of answering questions online we’ll have everything we need to start preparing your tax return.

Then get paired with a tax return accountant

That’s right, you’ll be matched with a real certified accountant who is best suited to prepare your return. Plus, they’re on hand for questions whenever you need.

We file your Self Assessment for you

Once you’ve signed off your return, your TaxScouts accountant will submit your return with HMRC for you.

That’s it! We told you it was simple.