Intestate and the Valuation Process
Intestate initially involves taking the value of all the assets owned by the deceased person, together with the value of:
- their share of any assets that they owned jointly with someone else - for example, a house that they owned with their partner
- any assets that are held in a trust, from which they had the right to benefit
- any assets that they had given away, but in which they kept an interest - for instance, if they gave a house to their children but still lived in it rent-free
- certain assets that they gave away within the last seven years
Next, from the total value above, deduct everything that the deceased person owed, for example:
- any outstanding mortgages or other loans
- unpaid bills
- funeral expenses
If the debts exceed the value of the assets owned by the person who has died, the difference cannot be set against the value of trust property included in the estate.
The value of all the assets, less the deductible debts, gives you the estate value. The threshold above which the value of estates is taxed at 40 per cent is £325,000 for the 2010/11 tax year.
Speak to a member of an independent inheritance tax advice team who can offer advice and assistance on dealing with inheritance tax and passing inheritance on in a tax efficient manner.
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