There are three main taxes that you may have to deal when someone close to you dies.
If it seems probable that tax will be payable we recommend getting professional help with the estate.
Inheritance Tax
This is a tax on someone's assets when they die. Currently the value above which inheritance tax is payable is £312,000. Everything over that amount will be subject to a tax of 40%.
A higher allowance may be available if the deceased was a widow or widower.
The persons' assets may include:
Tax
Property
Pensions
Investments
Insurance policies
Individual items such as cars, jewellery, paintings
Gifts that the person made but were benefiting from, for example if they had given their property to someone else but were still resident there
Gifts that they had made in the last seven years
Assets held in trust that generated an income
Income Tax
Some income is taxable above a certain level. The following could be subject to income tax:
Some income is taxable above a certain level. The following could be subject to income tax:
Earnings from employment or self-employment
Pensions - state, company and personal
Interest on savings
Income from shares (dividends)
Rental income
Income paid to you from a trust
Capital Gains Tax (CGT)
The estate of the person who died may be liable to CGT on things they owned that they sold, gave away or transferred wherever in the world they were located. CGT is a tax on the profits or gains that they made on the disposal of these assets.
There are various tax forms to complete for each of the above, differing in complexity depending on the person's financial situation.
Page Last Updated : 24/04/08