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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Calculating the chargeable estate: calculation where residue partly chargeable and no chargeable specific gifts

If a share of the residue (IHTM26003) is the only part of the deceased’s estate which is taxable, in practice you can calculate the chargeable part of the estate by:

  • firstly, deducting the value of any exempt specific gifts (IHTM26011), and
  • then apportioning the balance of the estate between the beneficiaries in the ratio to which they are entitled to share in the residue

The amount apportioned to the chargeable beneficiaries is the chargeable estate.


Baldev dies in July 1999 leaving an estate of £600,000. There is no relievable property.

Under his Will he leaves:

  • £30,000 to a charity (IHTM11112)
  • Residue equally to Baldev’s wife (IHTM11032) and only child

Your calculation to find the amount of the chargeable residue is

Value of estate £600,000
Less exempt legacy -£30,000
Residue £570,000
Chargeable half share £285,000

Please note that, if the estate includes relievable property, interaction (IHTM26101) will apply.