IHT100 Cannot Deduct This Liability. OK But Daft?

IHT 100 Box E16/F13 (Liabilities) for IHT Valuation Can't be Deducted. What if Paid Month Earlier?

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Nice simple illustration of present situation.

Discretionary Trust 20 years old on 5 October 2017. Valuation of land for IHT 20th anniversary obtained from Ch Surveyor on 6 October 2017 and invoice for valuation fee raised on 6 October 2017.

Assume Trustee must have engaged Ch Surveyor at the very least a few days before 20th anniversary date, so liability would have existed at least a few days before 20th anniversary.

According to IHT 110 page 17, (Debts and Liabilities) "Any solicitors or estate agents fees and any valuation fees incurred in dealing with the valuation cannot be deducted".

But what would the position have been if, say, Trustee had engaged Ch Surveyor say, 1 month before the 20th anniversary and then paid Surveyor's bill a week or two before the anniversary. That would have meant that the Trust bank account would have been depressed by the bill well before the anniversary.

In that scenario I take it that the Ch Surveyors IHT valuation fee would then have been allowed for IHT purposes. Because all that the IHT account asks for is the bank balance on the anniversary date.

Do the readers agree. If so, seems strange how a difference of a few weeks makes a world of a difference.

I remember that decades ago the renowned IHT genius Jonathan Zigmond strongly advocated incurring liabilities before the 10th anniversaries, but I assume that advice would preclude IHT valuation fees.

 

 

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By Tax Dragon
18th Jan 2019 06:00

penelope pitstop wrote:

I assume that advice would preclude IHT valuation fees.

I'm not sure you've said what you meant there. But I see no basis at all for adding a fictional asset comprising money already laid out, if that's what you mean. It's not an income tax computation based on accruals and addbacks of disallowable expenses; it's a notional transfer of value of assets to which Part VI applies.

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