IHT - value of p'ship assets and debt

IHT - value of p'ship assets and debt

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Partnership between father and son

Net assets £400 (all trading assets).

Capital accounts, Father credit £600, son debit £200.

Partners share all profits equally

Son dies.

What entries go onto his IHT form?

Is it 50% * 400 (covered by BPR) then a £200 debt to father?

I am concerned that the £200 is non deductable for IHT.  There is of course no p’ship agreement.

The reason I am concerned is that if we reverse the situation and father had died he would have had 50% * 400 (covered by BPR) , and we would have omitted to recognise the debt due from son.

Mind going blank on this??

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By blok
19th Sep 2012 10:21

.

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