Expenses and liabilities

Produced by a Tolley Trusts and Inheritance Tax expert

Trusts and Inheritance Tax

Guidance

General principles

Expenses and liabilities may reduce the value of property to be charged to inheritance tax. This general principle arises from the ‘meaning of estate’ given in IHTA 1984, s 5 which includes the provision:

“In determining the value of a person's estate at any time his liabilities at that time shall be taken into account, except as otherwise provided by this Act.”

Transfers of value are quantified with reference to the amount by which a person’s estate has diminished. The transfer on death is equal to the value of the whole of a person’s estate immediately before his death. It follows that the value of transfers is reduced by the associated liabilities.

When considering settled property, inheritance tax is charged with reference to the ‘value of the property or part at that time’.

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

Access this article and thousands of others like it
free for 7 days with a trial of TolleyGuidance.

TAKE A FREE TRIAL

Popular Articles

Personal Tax

Taxation of dividend income

Taxation of dividend incomeIntroductionA dividend is a distribution of profit by a company to its shareholders.A dividend is not only a payment in cash. It can be the issue of new shares in exchange for forfeiting the right to a cash payment (a stock dividend). For more detail, see the Cash

14 Jul 2020 13:48 | Produced by Tolley Read more

Tax Returns

Trusts and Inheritance Tax

Winding up a trust ― legal, administrative and compliance issues

Winding up a trust ― legal, administrative and compliance issuesOverviewWhen winding up a trust, there are legal formalities and compliance issues that need to be dealt with, as well as IHT and CGT consequences that flow from the termination. This guidance note considers when and how a trust comes

14 Jul 2020 14:01 | Produced by Tolley Read more

Value Added Tax

Exemption ― overview ― items exempt from VAT in the UK

Exemption ― overview ― items exempt from VAT in the UKVAT exemption: list of supplies exempt from UK VATThe goods or services that are exempt from VAT are listed under various group headings within VATA 1994, Sch 9, Pt II.It is important to remember that not all supplies that come within a heading

14 Jul 2020 12:45 | Produced by Tolley Read more

UU��ֱ��