Commentary

I10.241 Right to refund of IHT from a third party

IHT, trusts and estates

I10.241 Right to refund of IHT from a third party

Right to refund of IHT

I10.241 Right to refund of IHT from a third party

Right to refund—Generally

Where IHT paid by personal representatives in respect of the chargeable transfer made on death does not form part of the general testamentary and administration expenses it must, where required, be repaid to them by the person who receives the property to which the IHT relates1.

Repayment will also due where the deceased's Will expressly requires tax on specifically bequeathed or devised free UK property to be borne by the legatee or devisee2.

The amount the personal representatives can recover includes any interest charged on the IHT and any costs properly incurred in relation to it3.

Transferor

A transferor who has paid IHT has no right to recover it from the transferee unless, before the transfer, the transferee expressly undertook to pay the IHT. Where the transferor has this enforceable right of reimbursement (whether under principles of conditional gift or of contract) it would seem that he should have to pay only the amount of IHT payable by the transferee without grossing-up4. Neither the transferor nor his spouse or civil partner (if liable5) has any right to sell or mortgage the transferred property in order to raise the IHT6.

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