On-Demand Events
Calculating Inheritance Tax: A Step-by-Step Guide for Advisers
19 Mar 26 5 min read
Inheritance Tax (IHT) continues to affect a growing number of estates, and advisers are increasingly required to navigate the complex rules that determine an individual’s liability. Before exploring any planning strategy, the essential first step is accurately assessing the size of the client’s IHT exposure. This involves understanding a wide range of factors, including exemptions, reliefs, transferable allowances and the interaction between the nil‑rate bands.
From April 2027, most pensions will also fall within the IHT calculation for the first time, adding a new layer of complexity to an already intricate process.
In this session, Senior Technical Managers Neil Macleod and Shoaib Ahmed provide a clear, structured walk‑through of the steps involved in calculating an individual’s IHT liability—both under the current rules and within the forthcoming pension reforms.
Neil Macleod (Senior Technical Manager, M&G Wealth)
Shoaib Ahmed (Senior Technical Manager, M&G Wealth)
60 minute session followed by approximately 30 mins Q&A
Structured CPD accredited by CII
Learning outcomes
By the end of this session, you will be able to:
- Identify and explain the key components that form part of the UK Inheritance Tax calculation.
- Apply a step by step methodology to determine an individual’s IHT liability using current legislation.
- Describe how the IHT treatment of pensions will change from April 2027 and outline how this impacts future calculations.
Claiming your CPD
To claim your CPD certificate, test your knowledge with the questions below.
Write down your answers to each of the following questions and check your answers when you click to claim your CPD certificate on the link below
1. Alison passes away and in her Will has left various gifts. Which of the following would not be an exempt gift when it comes to calculating her IHT liability?
a) A gift to a UK long term resident spouse
b) A gift to a registered UK political party
c) A gift of qualifying business relief assets
d) A gift to a UK registered charity
2. Sarah’s husband Andrew passed away 3 years ago. In his Will he left his entire estate to Sarah other than a small legacy to his daughter Louise of £10,000. Andrew used his annual exempt amount every year but in addition he made two other gifts during his lifetime. He gifted his daughter £50,000 8 years before his death and a further £50,000 1 year before his death. How much unused nil rate band is available for Sarah to claim on her death?
a) 81.5385%
b) 66.1538%
c) 100%
d) 96.9231%
3. Norman has recently gone into residential care. He has sold his house for £300,000 and now holds that money on deposit. Norman has two adult children to whom he is going to leave his entire estate in his Will. Norman was married once during his lifetime but this ended in divorce. If Norman were to pass away today what is the maximum residence nil rate band his estate will qualify for?
a) £350,000
b) £300,000
c) £175,000
d) Nil
To claim your CPD certificate, test your knowledge with the questions below.
Write down your answers to each of the following questions and check your answers when you click to claim your CPD certificate on the link below
1. Alison passes away and in her Will has left various gifts. Which of the following would not be an exempt gift when it comes to calculating her IHT liability?
a) A gift to a UK long term resident spouse
b) A gift to a registered UK political party
c) A gift of qualifying business relief assets
d) A gift to a UK registered charity
2. Sarah’s husband Andrew passed away 3 years ago. In his Will he left his entire estate to Sarah other than a small legacy to his daughter Louise of £10,000. Andrew used his annual exempt amount every year but in addition he made two other gifts during his lifetime. He gifted his daughter £50,000 8 years before his death and a further £50,000 1 year before his death. How much unused nil rate band is available for Sarah to claim on her death?
a) 81.5385%
b) 66.1538%
c) 100%
d) 96.9231%
3. Norman has recently gone into residential care. He has sold his house for £300,000 and now holds that money on deposit. Norman has two adult children to whom he is going to leave his entire estate in his Will. Norman was married once during his lifetime but this ended in divorce. If Norman were to pass away today what is the maximum residence nil rate band his estate will qualify for?
a) £350,000
b) £300,000
c) £175,000
d) Nil
Before collecting your certificate, please take a moment to provide us feedback on this session, please email prudential.distribution.team@prudential.co.uk
Complete the form below and we’ll email your CPD confirmation to you. Please use the email address that you would usually use when contacting us.
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