Commentary

I3.231 Deduction of liabilities generally

IHT, trusts and estates

I3.231 Deduction of liabilities generally

Deductions from an estate

I3.231 Deduction of liabilities generally

Most of the rules considered below apply to both lifetime transfers and transfers on death, but are of much greater importance on death, because most liabilities are deductible from the estate in ascertaining its value both before and after a lifetime transfer1. These liabilities will therefore not affect the value transferred unless the transfer in some way affects the amount or value of the liability.

For the rules as to liabilities deductible and non-deductible on death see I4.141–I4.154.

General rule

The general rule is that liabilities, other than those imposed by law, shall be deducted to the extent that they were incurred by the transferor for

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