The following Private Client guidance note Produced in partnership with Alison Cartin of Bryan Cave Leighton Paisner LLP provides comprehensive and up to date legal information covering:
FORTHCOMING CHANGE: As announced at Budget 2018, draft legislation to be included in Finance Bill 2019–20 was published on 11 July 2019 and includes a measure to provide that additions of assets by UK domiciled or deemed domiciled individuals to trusts made when they were non-domiciled cannot be excluded property and are therefore within the scope of IHT. See News analysis: Draft Finance Bill 2019–20—Private Client analysis.
Property is valued for inheritance tax (IHT) purposes as:
the price that the property might reasonably be expected to fetch if sold in the open market at that time
provided that price is not assumed to be reduced on the ground that the whole property is placed on the market at the same time
This is known as the open market value test.
For further information on the valuation of assets for IHT purposes and related principles, see Practice Note: IHT—valuation principles and particular types of property.
In valuing an individual’s estate in order to calculate the IHT due on their death, the personal representatives (PRs) can deduct the deceased individual’s debts and liabilities. Liabilities are also, generally, deductible when valuing an individual’s estate at the time of a lifetime gift and in valuing trust
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