This Q&A refers to a secured debt, so it is assumed that there is a loan agreement which contains a term that the debt is secured on the house, rather than just a sum charged on the house by the executors prior to the transfer of the house to the surviving spouse. The sum charged is therefore referred to as a ‘debt’ below. The general valuation principle for inheritance tax (IHT) is that an asset or property is valued at its market value. See Practice note: IHT—valuation principles and particular types of property. The question is therefore ‘what would a third party pay for the debt if it were to be sold on the

Agricultural property relief (APR) is a relief available against inheritance tax in respect of the agricultural value (ie not including non-agricultural value such as planning permission) of gifts of agricultural property made by an individual during their lifetime or on their death. Agricultural land let before 1 September 1995 qualifies for 50% APR under the Agricultural Holdings Act 1986 (AHA 1986). 100% APR

Section 44(2) of the Inheritance Tax Act 1984 (IHTA 1984) provides that where more than one person is a settlor in relation to a settlement ‘and the circumstances so require’, IHTA 1984, Part III (except IHTA 1984, s 48(4)–(6)) shall have effect in relation to it as if the settled property were comprised in separate settlements. IHTA 1984, s 44(2) therefore applies for the purposes of IHTA 1984, ss 43–93. IHTA 1984, s 201(4) makes similar provision. The addition

Unless the trust created by the Will included a specific legacy to the trustees, the trust could be constituted with any property or cash held by the deceased (but not the subject of another specific legacy) or could be constituted with a charge created by the executors of the estate or, alternatively, with a loan made by the trustees to one or more of the beneficiaries of the trust. Despite the lack of a transfer of real or personal property to the trustees, the trust will hold a trust asset, being a chose in action. During the estate administration period, that will be the right to the proper

Broadly, personal contract purchase (PCP) is a loan from a finance company for the purchase of a car. However, unlike a normal personal loan, the borrower does not pay off the full value of the car; nor will they own the vehicle at the end of the deal, unless they choose to pay a much larger final ('balloon') payment. The

The personal representative can sell the house and moreover, unless the gift to the school is invalid for some reason, or funds can be raised some other way (such as by mortgaging

A personal representative must show that they have made reasonable efforts to try and locate the beneficiaries of the estate, otherwise they risk committing a breach of duty. Suggestions as to locating a beneficiary: • check the personal effects of the deceased

We have assumed that this Q&A relates to a scenario in which the testator has not made any other Will (eg in another jurisdiction) and also that the English law Will does not contain any declarations as to domicile or choice of law. This Q&A does not state the nationality of the testator, which may also be relevant (see below). In considering the impact of a subsequent same-sex marriage on the validity of the testator’s earlier English law Will but where the testator is now domiciled abroad, questions arise as to the formal validity of the Will and the essential validity of its contents in light of the relevant law applicable to the succession of the testator’s estate. Formal validity of Will Wills Act 1963 (WA 1963),

See Q&A: A testator owns shares in the parent company of a trading group of companies. The value of the shares is restricted for the purposes of business property relief (BPR) due to excepted assets or the group company rules, so that the value will not be fully relieved. One of the LexisNexis Will precedents contains a legacy of property which is eligible for BPR at a rate of 100% to be held on discretionary trusts. Is it possible to amend the precedent to extend to

In answering this Q&A we assume that the estate concerned does not exceed £2m so that the residence nil rate band (RNRB) is not subject to taper. We have also assumed that the testator has not survived a spouse or civil partner (ie that there is no transferable RNRB available to the testator’s estate). Qualifying residential interest The RNRB is set against the value of a residential interest passing to qualifying beneficiaries. It is not necessary for the residence itself to be specifically bequeathed to those beneficiaries. The legislation defines a 'qualifying residential interest' (QRI). The main condition is that the deceased

The 2nd edition of the STEP Standard Provisions (2nd edition) states: ‘1 Incorporation of STEP Provisions 1.1 These provisions (with the exception of the Special Provisions) may be incorporated in a document by the words: The standard provisions of the Society of Trust and Estate Practitioners (2nd Edition) shall apply or in any manner indicating an intention to incorporate them.’ As set out in the Guide for Practitioners, Testators and Settlors (set out at the end of the STEP Standard Provisions

Practice Note: Introductory guide to residence and domicile for UK tax purposes before 6 April 2025 [ARCHIVED] provides a summary of the UK income tax, capital gains tax and inheritance tax (IHT) implications for an individual of being resident and/or domiciled in the UK. Whilst the Q&A refers to the non-UK residence of the surviving spouse, the Practice Note: Introductory guide to residence and domicile for UK tax purposes before 6 April 2025 [ARCHIVED] confirms that when considering