Calculating inheritance tax
You are an executor and you want to make a rough calculation of how much inheritance tax your estate will have to pay. To determine this many assets might have to be valued as at the date of death. The estate includes all assets including property, cash, stocks and shares, ISAs, business interests, loans due, furniture, jewellery, cars and other valuables. Once the asset position is established you can subtract liabilities like mortgages, credit cards, other debts and funeral expenses. If the resulting figure is less than the £325,000 threshold there is no inheritance tax. Anything above that rate will be taxed at 40%. Remember of course if the deceased survived his or her spouse and had inherited the whole of that estate the £325,000 could be increased up to £650,000.
If the estate earns money while it is being administered and distributed it will be necessary for the executors to complete the tax return and pay tax on income received.