IHT pay by installments calculation

bikeman

Hi

How do I calculate what IHT I need to pay now if I apply to pay by yearly installments?

House value £545,000 + Other assets £440,000 (share ISA) = £985,000

Less nil rate allowance £500,000 

IHT due £485,000 x 0.4 = £194,000

Do I just need to pay 10% ie £19.4k before probate?

Thanks

RAS

We assume from this that this is a single or divorced person, leaving assets to direct descendants? And with no gifts, or gifts with reservation?

I think that if you can realise assets worth £194k, ideally you'll pay that before applying for probate.

Hoenir

RAS said:

We assume from this that this is a single or divorced person, leaving assets to direct descendants? And with no gifts, or gifts with reservation?

I think that if you can realise assets worth £194k, ideally you'll pay that before applying for probate.

Before HMRC will agree to probate being granted. 

Keep_pedalling

With £440k worth of shares in the estate you would be better off going down the direct payment scheme route which will save you interest charges. 

You will need to complete schedule IHT423 with your IHT return. 

https://assets.publishing.service.gov.uk/media/5e553e16e90e074dcd5bd273/Direct_Payment_Schemes_for_Inheritance_Tax__IHT423_.pdf

bikeman

Keep_pedalling said:

With £440k worth of shares in the estate you would be better off going down the direct payment scheme route which will save you interest charges. 

You will need to complete schedule IHT423 with your IHT return. 

https://assets.publishing.service.gov.uk/media/5e553e16e90e074dcd5bd273/Direct_Payment_Schemes_for_Inheritance_Tax__IHT423_.pdf

The iht423 says its for banks and building societies. I thought iy could only be used for cash held in investment accounts. I cant see how it can be used for share isas when theres nowhere to specify which investments to sell. Are you sure this is possible?

There are some directly held shares but they are foreign investments, so I doubt they would direct pay. 

Keep_pedalling

bikeman said:

Keep_pedalling said:

With £440k worth of shares in the estate you would be better off going down the direct payment scheme route which will save you interest charges. 

You will need to complete schedule IHT423 with your IHT return. 

https://assets.publishing.service.gov.uk/media/5e553e16e90e074dcd5bd273/Direct_Payment_Schemes_for_Inheritance_Tax__IHT423_.pdf

The iht423 says its for banks and building societies. I thought iy could only be used for cash held in investment accounts. I cant see how it can be used for share isas when theres nowhere to specify which investments to sell. Are you sure this is possible?

There are some directly held shares but they are foreign investments, so I doubt they would direct pay. 

Apologies, my error. 

bikeman

bikeman said:

Hi

How do I calculate what IHT I need to pay now if I apply to pay by yearly installments?

House value £545,000 + Other assets £440,000 (share ISA) = £985,000

Less nil rate allowance £500,00 

IHT due £485,000 x 0.4 = £194,000

Do I just need to pay 10% ie £19.4k before probate?

Thanks

Can someone answer this please and explain how the repayment system works? thanks

Keep_pedalling

10% is the minimum you need to pay for the first instalment.

Hoenir

bikeman said:

bikeman said:

Hi

How do I calculate what IHT I need to pay now if I apply to pay by yearly installments?

House value £545,000 + Other assets £440,000 (shares) = £985,000

Less nil rate allowance £500,00 

IHT due £485,000 x 0.4 = £194,000

Do I just need to pay 10% ie £19.4k before probate?

Thanks

Can someone answer this please and explain how the repayment system works? thanks

How much is held in accessible "cash deposits"?   Banks, buildings societies, NSI etc.

bikeman

Keep_pedalling said:

10% is the minimum you need to pay for the first instalment.

I need to know how this is calculated. I have taken 10% of the full IHT due but I dont think this is right.

Keep_pedalling

bikeman said:

Keep_pedalling said:

10% is the minimum you need to pay for the first instalment.

I need to know how this is calculated. I have taken 10% of the full IHT due but I dont think this is right.

Why do you think that?

you can always pay more if you can which will reduce interest charges.