Example 2 - A widow owning a property In this second example, a widow has died, four years after the death of her husband. Her husband’s nil-rate band has been passed to her. On her death, her property was worth £400,000. Total gross value of estate £1,200,000 Less NRB (£325,000 x2) -£650,000 Less RNRB (£175,000 x2) -£350,000 Value of estate above IHT £200,000 nil-rate band IHT payable – 40% of £80,000 £200,000 Net value of estate after tax £1,120,000 BUSINESS RELIEF CAN REDUCE YOUR IHT BILL Business Relief can reduce the value of a business or its assets when working out how much IHT must be paid. Any ownership of a business, or share of a business, is included in the estate for Inheritance Tax purposes. You can get Business Relief of either 50% or 100% on some of an estate’s business assets, which can be passed on either while the owner is still alive, or as part of the will. Key point – Knowing how IHT is calculated will help you realise how it could impact on the value of your estate that passes to your beneficiaries on death.