What are the gross and net estate?

These are key figures which determine, amongst other things, which inheritance tax forms can be used.

Gross estate

The gross value of an estate is the total value of assets, including bank accounts, cash, savings, house, land, shares, business interests, money owed to the deceased, pension pay-outs and more.

The gross value includes the value of the deceased’s share of jointly owned assets.

Net estate

Before inheritance tax exemptions have been applied, the net estate is the gross estate minus debts and funeral expenses.

This is also known as the “net estate for inheritance tax purposes”.

After exemptions, the value of the exemptions are deducted too (the exemptions are the spouse/civil partner exemption and the charity exemption).

This is also known as the “net qualifying value for excepted estates”.

If, after exemptions, the net qualifying value for excepted estates is more than the current nil-rate band (£325,000), there will be inheritance tax.

Gross and net values for which a grant is (or is not) required

When completing inheritance tax forms, you may see reference to the following phrases:

• The gross value of assets for which a grant is not required;
• The net value of assets for which a grant is not required;
• The gross value of assets for which a grant is required; and
• The net estate in the UK for the grant.

These figures do not impact on inheritance tax. The Probate Wizard will calculate these figures automatically.