Administrators/executors can calculate IHT themselves through the IHT400 (for information about IHT forms, click here). If the administrator/executor cannot work out or struggle to come to a conclusion on the IHT they can either ring the
IHT helpline on: 0300 123 1072. If they wish to leave the calculations to HMRC, they can.
In the 2015 Summer Budget, the Chancellor, George Osborne announced a new transferable main residence allowance, which will gradually increase from £100,000 in April 2017 to £175,000 per person by 2020/21.
This is in addition to the main nil-rate band. It will effectively raise the IHT-free allowance to £500,000 per person.
Where married couples jointly own a family home and want to leave this to their children, the total IHT exemption will be £1m.
If you are single and die during the tax year 2016-2017 with an estate worth more than £325,000 (including money, property and investments, but after deducting debts and expenses such as funeral costs).
40% tax will become due on anything above £325,000.
For example, if you leave behind an estate worth £500,000 the tax bill will be £70,000 (40% on £175,000 – the difference between £500,000 and £325,000)
However, if you are married or in a civil partnership, you may be able to leave more than this before paying tax.