We've created this tool to help you work out the size of the Inheritance Tax (IHT) bill you could leave behind when you die. It also shows how your IHT bill could increase as your wealth grows. This can help you future proof your IHT planning, giving you more certainty that your loved ones won't have to worry about it.
The following information is based on VitalityLife’s understanding of current legislation, taxation law and practice. Tax treatment depends on your individual circumstances and may be subject to change in future. The results provided by this Calculator do not constitute as advice.
Terms and conditions apply.
Based on your total wealth of £0 today, then in the event of your death your potential IHT bill could be:
£0
However, by the time you're xx, your wealth may have grown to £xxx,xxx. This means your IHT bill could also have grown to:
£0
So that's an increase in your wealth of xxx%, and an increase in your IHT bill of xxx%.
Select IHT view:
Getting cover for your potential IHT bill means your loved ones will not have to worry about selling off any assets like the family home when you die. So it gives both you and your loved ones peace of mind when you're gone.
But it is also important to think ahead so you can protect your estate against IHT both now and in the future as your wealth grows. To future proof your IHT plans there are a number of things you could do:
The figures calculated here are only estimates of your current and future IHT bill based on the information provided and the assumptions stated. You should seek independent professional financial advice when calculating what cover you need.
VitalityLife only provides Life Cover to those aged between 18 and 75 at the time of taking out cover.
We offer Life Cover on both a Whole of Life and Term basis. Term cover is only available up to 70 years.
The default investment returns are based on historical annualised returns over the 10 years to 31 March 2013. The growth rates are based on:
The nil-rate band is the amount below which your estate will not pay any inheritance tax, and is currently set at £325,000 for individuals (frozen until April 2026).
The government also has an additional nil-rate band, which will apply where the main residence is being passed onto children or grandchildren on death of £175,000 (frozen until April 2026).
Any unused nil-rate band will be able to be transferred to a surviving spouse or civil partner.
The additional nil-rate band will also be available when a person downsizes or ceases to own a home on or after 8 July 2015 and assets of an equivalent value, up to the value of the additional nil-rate band, are passed on death to direct descendants.
There will be a tapered withdrawal of the additional nil-rate band for estates with a net value of more than £2 million. This will be at a withdrawal rate of £1 for every £2 over this threshold.
If you leave all of your wealth to your spouse or Registered Civil Partner (RCP), then providing they are UK domiciled there will be no inheritance tax is payable. Where the spouse or RCP is not domiciled in the UK the spouse exemption is limited to £325,000. Using the spouse exemption means that some or all of your individual nil-rate bands are unused. HMRC allow you to transfer any unused nil-rate bands to a spouse or RCP.
Any estate will then be charged inheritance tax at a rate of 40% (or 36%) on all taxable assets above this amount.
Leaving assets to unmarried partners or children does not qualify for any IHT relief.
Please note that you should always seek advice when calculating how much your nil-rate band is, as it may vary depending on your individual circumstances and plans for your estate.
If you opt to leave more than 10% of your 'baseline' estate to charity, then HMRC will reduce the inheritance tax rate it will charge your estate from 40% to 36%. 'Baseline' estate is the value of your estate remaining after deducting your nil-rate band. So if you have an estate of £500,000 and a nil-rate band of £325,000, then your baseline estate will be £175,000. Normally the inheritance tax bill will be £70,000 (=£175,000 x 40%).
If however you opt to give 10% or more of your 'baseline' estate to charity, then your IHT rate will fall to 36%. That means at least a £17,500 donation to charity in this case. By applying 36% to your residual estate, after deducting both the nil-rate band and charity donation, then in this case the IHT bill will be £56,700 (= £500,000 - £325,000 - £17,500 = £157,500 x 36%). That's a reduction in the IHT bill of £13,300.
If you select the option to leave at least 10% of your estate to charity, the calculator will work out how much inheritance tax you will pay assuming you give 10% of your 'baseline' estate to charity.
Please note that you should always seek advice when calculating how much your inheritance tax rate is, as it may vary depending on your individual circumstances and plans for your estate.
