Tax burden on death: summary
The Inheritance Tax (IHT) paid on the earlier chargeable transfer (IHTM04027) cannot have increased your deceased’s estate. So you have to ensure that your calculation of the assets your deceased received does not include the tax paid on them.
Jonathan died in July 2011 having received the entire free estate of Simon who died in January 2008. Simon’s death estate, wholly chargeable, consisted of:
|Total chargeable transfer||£563,000|
The IHT on the free estate was £62,000. It has all been paid.
The increase in your deceased’s estate was:
|Value of earlier free estate as agreed for IHT||£155,000|
|Less tax on that value||£62,000|
|Net value after tax||£93,000|
Where the earlier transfer was on death, in general