Expenses and liabilities

Copyright © 2025 LexisNexis
Produced by a Tolley Trusts and Inheritance Tax expert
Trusts and Inheritance Tax
Guidance

Expenses and liabilities

Copyright © 2025 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 gift

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

Personal Tax

Foreign tax relief

Foreign tax reliefIncome and gains may be taxable in more than one country. The UK has three ways of ensuring that the individual does not bear a double burden:1)treaty tax relief may reduce or eliminate the double tax2)if there is no treaty, the individual can claim ‘unilateral’ relief by deducting

14 Jul 2020 11:44 | Produced by Tolley Read more Read more
tag-icon Tax Returns
Trusts and Inheritance Tax

BPR ― trading and investment businesses

BPR ― trading and investment businessesIntroductionThe basic qualification rules for business property relief (BPR) are illustrated in the Flowchart ― trading or investment business for BPR purposes.For an overview of BPR, see the BPR overview guidance note.Relevant business propertyThe main

14 Jul 2020 15:36 | Produced by Tolley Read more Read more
Trusts and Inheritance Tax

Corrections and amendments to the IHT account

Corrections and amendments to the IHT accountThis guidance note explains how to deal with changes to the taxable values in the original inheritance tax account.Why do amendments arise?When the IHT account is first submitted to HMRC, it is based on information available at an early stage of the

14 Jul 2020 11:20 | Produced by Tolley Read more Read more