Know your IHT liability use our Inheritance Tax calculator
The Principle First Inheritance Tax calculator is an effective way of working out your potential liability for Inheritance Tax, or IHT, on wealth you wish to leave to your children.
An Inheritance Tax calculation takes just a few minutes, but it is the crucial first step in avoiding IHT. Taking just a few minutes to calculate Inheritance Tax is well worth doing - IHT is levied at 40% on all eligible assets.
Once you have worked out your potential liability with our IHT calculator, Principle First can provide quality Inheritance Tax advice that could save you and your family thousands.
Calculate IHT with the Principle First Inheritance Tax calculator now or ring us on 0800 678 5929
How does the Principle First Inheritance Tax calculator work?
As an individual, you have a tax-free allowance, or nil rate band, for IHT of £325,000. While this may sound generous, it can rapidly be used up, as it applies to the total value of your estate. Anything in excess of this allowance is over the IHT threshold and subject to Inheritance Tax at 40%.
Your estate includes the value of your home and other properties, cars, valuables, savings, investments, and insurances – less the value of your outstanding mortgage, loans and other debts.
To calculate Inheritance Tax, you simply enter these values in response to the questions in our Inheritance Tax calculator. The IHT calculator will then tot up the value of your estate, and deduct your £325,000 allowance (£650,000 for a married couple or civil partnership), to show how much of your wealth could be liable to Inheritance Tax.
The Inheritance Tax Calculator will then show the key figure: how much you would have to pay in Inheritance Tax at this moment.
Avoiding IHT with Inheritance Tax gifts
You can use IHT gifts to pass cash, assets, and ownership of your property to your children before you die. However, if you transfer your home to your children, but continue to live there, your property is declared a ‘gift with reservation’, and will still be liable to IHT, because you continue to benefit from it. To avoid this, you must pay rent to your children as the owners of the property, in order to create an ‘arm’s length’ arrangement.
Life policies written in trust
Another efficient way of avoiding IHT is by writing your life insurance policies in trust. When buying a life insurance policy you can fill out one simple form to create a trust naming your beneficiaries. Policies written in trust are not included in the value of your estate. With one simple procedure, you can knock thousands off the amount of your wealth liable to IHT.
Use the Principle First Inheritance Tax calculator to work out your liability for IHT – or let us do it for you! Get IHT advice now by making an advice enquiry online or phone us on 028 71273030.
