Expenses and liabilities

Copyright © 2026 LexisNexis
Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance

Expenses and liabilities

Copyright © 2026 LexisNexis
Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance
imgtext

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:

  1. •

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

  2. •

    the value of a

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
Powered by Tolley+™
  • 11 Nov 2025 09:30

Home/ Tolley Tax Guidance/ Trusts and Inheritance Tax / Understanding the key concepts of IHT

Popular Articles

Value Added Tax

Exporting goods ― proof of export

Exporting goods ― proof of exportIn addition to the requirements laid down in the Exporting goods ― overview guidance note, businesses intending to zero-rate exported goods must hold satisfactory evidence that the goods have been delivered to a destination outside of the UK. If satisfactory evidence

15 Dec 2020 14:02 | Produced by Tolley Read more Read more

Foreign self-employment

Foreign self-employmentTrading in another jurisdiction involves many issues, only some of which involve taxation. Advice should be taken, not only in relation to tax but on the wider business implications. For an overview of the points to consider for certain jurisdictions see Tolley's Global

Read more Read more
Corporation Tax

FRS 102 ― tax presentation and disclosures

FRS 102 ― tax presentation and disclosuresPresentation of tax under FRS 102An entity must present changes in a current tax liability (or asset) and changes in a deferred tax liability (or asset) as a tax expense (or income) unless the item creating the current or deferred tax amount is recognised in

14 Jul 2020 11:46 | Produced by Tolley in association with Steve Collings Read more Read more