IHTM26050 - Calculating the chargeable estate: calculation where residue partly chargeable and no chargeable specific gifts

If a share of the residue (IHTM26003) is the only part of the deceased’s estate which is taxable, in practice you can calculate the chargeable part of the estate by:

  • firstly, deducting the value of any exempt specific gifts (IHTM26011), and
  • then apportioning the balance of the estate between the beneficiaries in the ratio to which they are entitled to share in the residue

»Ê¹ÚÌåÓýapp amount apportioned to the chargeable beneficiaries is the chargeable estate.

Example

Baldev dies in July 1999 leaving an estate of £600,000. »Ê¹ÚÌåÓýappre is no relievable property.

Under his Will he leaves:

  • £30,000 to a charity (IHTM11112)
  • Residue equally to Baldev’s wife (IHTM11032) and only child

Your calculation to find the amount of the chargeable residue is:

Value of estate = £600,000

Less exempt legacy -£30,000

Residue = £570,000

»Ê¹ÚÌåÓýapp chargeable half-share is £285,000.

Please note that, if the estate includes relievable property, interaction (IHTM26101) will apply.