Commentary

I3.237 Future liabilities

IHT, trusts and estates

I3.237 Future liabilities

I3.237 Future liabilities

A future liability must be discounted1, where appropriate, in order for its present value to be ascertained2. This is subject to an exception for any IHT payable by the transferor on an immediately chargeable transfer, which is not subject to any discount3 — see I3.523. It should also be remembered that a liability is not deducted at all if or to the extent that it is not incurred for consideration (see I3.231).

If a deductible future liability is subject to a contingency at the date of valuation, the debt has to be discounted for the contingent element in addition to the delay in payment. The amount of the discount will depend upon the nature of the contingency and each case has to be

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