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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