Inheritance tax (IHT) is notoriously unpopular amongst people as it is as much as 40% tax on what your heirs inherit as your already taxed assets that you leave behind for them minus relatively small allowances.
It leaves grieving many families with a substantial tax liability at a difficult time. During 2019-20 alone, HMRC received £5.2 billion of inheritance tax in the UK. Tens of thousands of UK families have to pay inheritance tax each year when their loved ones pass away.
On a positive note, there are some several mechanisms for reducing this inheritance tax burden on your family. Our calculator below can help you get an estimate of what potential inheritance tax liability could be on your heirs.
Enter in your assets and liabilities if any, and the calculator will show the worth of your estate with an estimate of how much inheritance tax it may be subject to.
The inheritance tax calculator has the latest inheritance tax allowances for the 2020-21 tax year, which includes a residence nil-rate band (RNRB) is to relieve the burden by making it easier for individuals to pass on the family home without incurring inheritance tax.
Inheritance Tax Calculator
Value of your assets
Value of your savings (balance of bank accounts, etc)
Value of your investments (any shares, bonds, ISAs)
Value of your life insurance, not held in trust
Value of any business you own
Value of your liabilities
Hire purchase and any other debts
How much are you planning to leave to any charities in your will?
Will you be leaving property to your direct descendents?
Enter your figures above and tap Calculate to estimate your potential inheritance tax
Now that you have a rough idea how much your heirs might have to pay in inheritance tax when you pass away, you may want to add at least that amount to your life insurance sum assured to help them cover at least that part.
Please note that this calculator doesn't account for any gifts made, which may lead to a higher inheritance tax bill if the giver passes away within If the giver were to die within seven years of giving a substantial gift, this could leave the person receiving the gift with an unexpected inheritance tax (IHT) bill.
Such gifts are called Gift Inter Vivos - as explained in our Life Insurance Terms
article. Our life insurance advisers have life insurance products set up via trusts that helps deal with such inheritance tax liabilities, including those arising from gifts and inheritance.
If you'd like to get your free and no-obligation assessment of life insurance requirements and which life and critical insurance products and which providers can be most suitable for your circumstances, you can do so in less than 30 seconds.
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