To determine if inheritance tax is due, you must estimate the estate’s value to see if it exceeds the tax-free threshold. It may be helpful to start with some approximate values to see if the estate is close to being taxable. If it appears inheritance tax is owed or the estate is close to the thresholds, you will need more accurate valuations but the values should usually represent what might be reasonably obtained for the assets on sale. Identify the deceased’s assets, debts and gifts Assets include things like: Bank accounts Savings and pensions Property, buildings or land Household goods Personal items Cars and boats Stocks and shares Foreign assets Money owed to them Death benefits from life insurance policies or pensions Debts and liabilities include things like: Mortgages Personal loans Money owed on credit cards Utility bills Bills for goods and services not yet paid Funeral expenses Gifts only count toward the value of the estate if the deceased person gave them away within seven years of their death and the total gift value exceeds £325,000 but, if tax is payable on the estate, many gifts have to be reported. Additionally, tax may be due on ‘gifts’ that someone made more than seven years before their death but continued to benefit from them. Gifts include things like: Money Property or land Household and personal goods like furniture, jewellery or antiques Listed stocks and shares Unlisted shares (held for less than two years before the person’s death) Estimate the estate’s value To determine the value of the deceased person’s assets, contact the people or organisations responsible for holding them, such as banks, insurance providers or employers. For household goods and personal items, work out how much you could get for each item if you sold them on the open market. You must also determine what assets the person owned with someone else. The rules for valuing joint assets depend on whether they were owned as “joint tenants” or “tenants in common.” Seek help from a probate specialist for more information. To check for gifts the person gave whilst still alive, review bank statements and financial records and talk to family members. Record the value of any gifts from the past seven years and the dates they were given. Executors have been penalised by HMRC for failing to undertake due diligence when investigating gifts. Do not include the estate’s debts when estimating the gross value. However, you still need to know the total debt when reporting to HM Revenue and Customs (HMRC), so check for debt records from when the person died. Check if you need to report the value of the estate You do not need to give full details if no inheritance tax is owed and the estate counts as an “excepted estate.” This applies in most cases. What counts as an excepted estate depends on whether the person died on or after 1 January 2022, or on or before 31 December 2021. You need to send full details of the estate to HMRC if inheritance tax is due. You have 12 months from the date of the person’s death to report the value, or you could incur a penalty. Download and complete form IHT400 and mail it to the address on the form. If you need help filling in the form, contact a probate professional. You may still need to send full details to HMRC, even if no IHT is due. Check the GOV.UK website for more information.