Expenses and liabilities

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

This guidance note discusses the expenses and liabilities that can be deducted when calculating a transfer of value for inheritance tax purposes. It discusses the general principles applicable as well as specific provisions about deductions in the Inheritance Tax Act and the anti-avoidance legislation that has restricted deductions in some cases. This note also covers which asset the deduction for the liability can be taken from and how to deal with outstanding tax liabilities.

General principles

Expenses and liabilities will reduce the value of property to be charged to inheritance tax.

The deduction of liabilities is restricted in some circumstances by anti-avoidance legislation and these are covered below.

The value of any property for inheritance tax purposes is ‘market value’. The market value of assets is reduced by liabilities.

The practical application of these general principles to the valuation of property for IHT means that, for example:

•
the value of a death estate is reduced by the deceased's outstanding personal debts such as household bills and credit cards
•
the value of a gift

Continue reading the full document

To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™

TAKE A FREE TRIAL NOW

Popular Articles

Trusts and Inheritance Tax

Spouse exemption from inheritance tax

Spouse exemption from inheritance taxArguably, the most important inheritance tax exemption is the spouse exemption from inheritance tax.There is no IHT to pay on gifts from husband to wife and vice versa, or from one civil partner to the other (referred to collectively in this note as ‘spouses’).

14 Jul 2020 13:56 | Produced by Tolley in association with Emma Haley at Boodle Hatfield LLP Read more

Owner-Managed Businesses

Bad debts

Bad debtsBad debts usually arise where goods or services have been provided to a customer, for which payment has not been received within a reasonable or specified time period, or for which the customer is unable to pay. It is necessary to determine the quantum of relief that can be claimed for bad

14 Jul 2020 15:34 | Produced by Tolley Read more

Trusts and Inheritance Tax

Payments to trust beneficiaries

Payments to trust beneficiariesThis guidance note considers the trustees powers to make payments and whether the payment made is income or capital.This guidance note is designed to give outline and background for accountants and tax advisers who deal with clients establishing trusts. It is not

14 Jul 2020 12:52 | Produced by Tolley Read more

UU��ֱ��