The following Trusts and Inheritance Tax guidance note by Tolley in association with Michael Parkinson at Russell-Cooke Solicitors provides comprehensive and up to date tax information covering:
Under UK law, the PRs are liable for the inheritance tax due on the chargeable transfer made on death. The tax is funded out of the estate assets under their control. The value of those assets, reduced by the tax payable, will be distributed to the beneficiaries according to the Will or the rules of intestacy. The PR will need to resolve the question of who ultimately bears the burden of the tax.
Where a PR is liable to IHT on the estate of a deceased person, that IHT is treated as part of the general testamentary and administrative expenses of the estate (ie so that the burden of the tax falls on the residue of the estate) but only to the extent that:
IHTA 1984, s 211(1)
The effect of this is that IHT attributable to specific legacies of UK assets and cash legacies (if paid out of UK assets) falls on the residue of the estate.
It also follows from this that IHT on any foreign property is not treated as a testamentary expense (even though the PR will be liable to pay the tax); the burden of the tax therefore falls on the property to which it relates rather than residue.
Of course, it may be that the foreign property doe
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