Inheritance tax on the death estate turns on a single calculation — what is in the estate, what comes off it, and which rates and bands apply.
Every step in the death estate calculation builds on the one before, so a mistake at the valuation stage carries through to the final liability. This chapter begins with what the death estate comprises, the 40% and reduced 36% rates, and the structured calculation in which failed PETs and CLTs use up the nil-rate band first. It then works through valuing the estate's contents — the loss to estate principle, joint property, trust interests and life insurance — alongside the related property rules and the liabilities and funeral expenses that can be deducted. Finally it covers the spouse and charity exemptions, business property relief and quick succession relief, the standard, transferable and residence nil-rate bands, and how legacies left free of tax are grossed up.
