Illustrations - the death estate

In this lesson

1. 0:00 Nil rate band transfer between spouses
2. 1:26 Nil rate band and residence relief explained
3. 4:01 Calculating IHT on death estate assets
4. 5:01 Death estate valuation step by step
5. 6:11 IHT liability calculation and final result

About this lesson

You'll work through three detailed illustrations covering the nil rate band, the residence nil rate band (including the crucial rules about family homes left to direct descendants), and how to correctly value a death estate by distinguishing between deductible liabilities like repayment mortgages and non-deductible ones like endowment mortgages. These concepts are essential for calculating inheritance tax liability accurately, a core skill tested across ACCA and CIMA taxation papers. The first illustration shows how to calculate the additional nil rate band a surviving spouse can use—based on the unused proportion of their deceased spouse's allowance. The second walks you through a complete IHT calculation where both the standard nil rate band and the residence nil rate band apply, and teaches you the critical rule that residence nil rate bands cannot exceed the net value of the family home. The third illustration brings everything together: you'll learn which assets go into the death estate at their correct values (proceeds from life insurance, not open market value), which liabilities are deductible (repayment mortgages yes, endowment mortgages no), and which claims against the estate are allowable (funeral costs yes, informal promises no). By the end, you'll be confident handling complex death estates and calculating the correct IHT payable.

Duration: 6m