Understanding Inheritance Calculation

vonsworld

I'd just like to be sure I am understanding the inheritance tax calculation correctly.

If you are claiming the Residence Nil Rate band the threshold for IHT becomes £500,000. But lets say the total value of the estate including gifts is £510,000, of which IHT will be due on £10,000.

Various gifts have been made from the estate over the last 7 years totaling £50,000 after the annual allowances. In the last 3 years there were gifts of £15000 which pushed the estate over the threshold. Therefore no taper relief on gifts is available.

Therefore the IHT will be 40% of £10,000 = £4000.

I'm pretty sure this example is correct, but please could someone confirm,

Keep_pedalling

it will be correct providing the bulk of the estate is going to direct descendants and that the deceased was not widowed.