The following Trusts and Inheritance Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
The general rule is that liabilities are deducted from the value of an estate to determine the amount charged to inheritance tax. Refinements to this rule are described in the Expenses and liabilities guidance note.
There is a specific anti-avoidance rule targeted at situations where a liability has been ‘artificially’ created in the estate of the taxpayer. No deduction is allowed for any debt owed by the deceased where the sum lent to him derives from property previously given away by him.
Such a debt might arise where:
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