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Qualifying Loans and Estate Planning: Technical Considerations for Accountants

· 19 min

Executive Summary

The deductibility of liabilities from a deceased's estate for IHT purposes is governed by a legislative framework spanning four decades, from IHTA 1984 ss.5 and 162 through the restricted deduction rules introduced by Finance Act 2013 to the anti-avoidance provisions of FA 1986 s.103. Each pound of non-deductible debt costs an estate 40p in IHT at the standard rate. With HMRC launching 3,636 IHT investigations in the first nine months of 2024-25 and IHT receipts at a record GBP 8.2 billion, accurate treatment of estate liabilities carries material financial and compliance consequences.12 The residence-based IHT regime from 6 April 2025 redefines excluded property by reference to long-term UK resident status, while APR/BPR reforms from April 2026 introduce a GBP 2.5 million cap on 100% relief.34 This article provides accountants with an integrated four-layer restriction framework for estate liability analysis.

1. The Significance of Liability Deductions in Estate Planning

IHT is charged on the net value of a deceased person's estate after the deduction of allowable liabilities. At the standard 40% rate, each pound of legitimately deductible debt reduces the IHT charge by 40p -- making the accurate identification, classification, and reporting of liabilities one of the most consequential tasks in estate administration.5 Conversely, an incorrectly claimed deduction exposes the estate to penalties and interest following HMRC enquiry.

The fiscal landscape underscores this point. IHT receipts reached GBP 8.2 billion in 2024-25, a record figure, with Office for Budget Responsibility forecasts projecting GBP 14.5 billion by 2030-31.26 This trajectory is driven by frozen nil-rate band and residence nil-rate band thresholds (at GBP 325,000 and GBP 175,000 respectively until at least 2030), rising asset values, and the forthcoming inclusion of pension death benefits within the IHT estate from April 2027.47

HMRC enforcement activity has intensified in parallel. According to Freedom of Information data analysed by UHY Hacker Young, HMRC launched 3,636 IHT investigations in the first nine months of 2024-25 -- nearly 1,000 more than the equivalent period in the prior year. Since 2022-23, a total of 14,027 families have been subject to IHT investigation, with over 1,800 cases remaining active and 13 investigations approaching their fourth year.18 Form IHT419, which captures debts owed by the deceased, is a primary investigation trigger where liability deductions are significant or involve intra-family arrangements.910

The legislative framework governing liability deductions has grown incrementally since 1984, with major additions in 1986, 2013, and 2014 creating a layered system of restrictions that demands systematic navigation. The accountant's dual role -- advising on estate planning during the client's lifetime and preparing IHT400 returns after death -- makes comprehensive mastery of the deduction rules essential.

2. Foundational Rules: IHTA 1984 Sections 5 and 162

2.1 The General Deduction Principle

The starting point for liability analysis is IHTA 1984 s.5, which defines a person's estate as the aggregate of all property to which they are beneficially entitled (s.5(1)). In determining the value of that estate, liabilities at the relevant time -- the date of death for a transfer on death -- are taken into account (s.5(3)).5

The deduction is not unlimited. Section 5(5) provides that, except for liabilities imposed by law, a liability is deductible only to the extent it was incurred for consideration in money or money's worth.5 This "consideration requirement" excludes gratuitous promises to pay. A written IOU from the deceased to a family member, unsupported by consideration, is not a deductible liability regardless of its enforceability as a simple contract. The transferor's own IHT liability on the chargeable transfer is included within the deduction computation (s.5(4)), but liabilities for other taxes resulting from the transfer are not.5

2.2 Encumbrance Allocation and Foreign Liabilities

Section 162 establishes the allocation rules that determine which property bears the burden of specific liabilities. A liability that is an encumbrance on specific property must, so far as possible, reduce the value of that property (s.162(4)).11 A residential mortgage, for instance, must first reduce the value of the mortgaged property rather than being set against the general estate. This allocation rule has significant implications where the encumbered property qualifies for an IHT exemption or relief, because the liability reduces the value attracting the favourable treatment rather than chargeable property elsewhere in the estate.

Liabilities to non-UK residents that neither fall to be discharged in the UK nor encumber UK property must, so far as possible, reduce the value of property situated outside the UK (s.162(5)).11 Where a right of reimbursement exists in respect of any liability, the deduction is limited to the extent that reimbursement cannot reasonably be expected (s.162(1)). Liabilities falling due after the relevant time are valued as at the date of death, not at their future discharge date (s.162(2)).11

These foundational rules establish the baseline: liabilities are deductible if legally enforceable, incurred for consideration, and correctly allocated. The four layers of restriction introduced by subsequent legislation then qualify this baseline in material respects.

3. The Four Layers of Restriction

3.1 Layer One: Excluded Property Financing (Section 162A)

Finance Act 2013 introduced IHTA 1984 s.162A, which restricts the deduction of liabilities used to acquire, maintain, or enhance excluded property. Where borrowed money finances excluded property, the liability may be deducted only to the extent of non-excluded property received from any disposal of the excluded property (s.162A(2)), or where the property has ceased to be excluded, up to its current value (s.162A(3)).12 Any remaining excess liability may be deductible under s.162A(4), but not if it is attributable to arrangements with a main purpose of securing a tax advantage -- and "arrangements" is defined broadly to encompass schemes, agreements, understandings, and transactions (s.162A(7)-(8)).12

The restriction applies to deaths and other chargeable events occurring on or after 17 July 2013.13 From 6 April 2025, the definition of excluded property changed fundamentally: it is now determined by reference to long-term UK resident status (10 of the previous 20 tax years) rather than domicile, a point addressed in Section 4 below.3

3.2 Layer Two: Relievable Property Financing (Section 162B)

Section 162B addresses liabilities used to finance property qualifying for BPR, APR, or woodlands relief. Where a liability finances the acquisition or enhancement of BPR-qualifying property, that liability must first reduce the value of the qualifying property before relief applies (s.162B(1)-(2)). The same principle applies to APR-qualifying property (s.162B(3)-(4)) and woodlands (s.162B(5)-(6)).14

The practical consequence is significant. HMRC's worked example at IHTM28020 illustrates the point: where a taxpayer borrows GBP 450,000 (secured against the family home) to purchase AIM shares worth GBP 575,000 qualifying for BPR, the liability first reduces the AIM share value to GBP 125,000. BPR then applies only to the reduced value of GBP 125,000. Critically, the remaining liability cannot then be set against the house value, because s.162B(7) prevents the same liability from reducing value in a subsequent chargeable transfer.15

This restriction applies to liabilities incurred on or after 6 April 2013 where the borrowed funds finance relievable property.13 Where the borrowing already appears in business accounts (as with a sole trader's overdraft), the liability has already reduced net business value and no duplicate deduction is permitted.15

For APR-qualifying property, the same principle operates with an additional complexity: where a loan financed mixed-use property (residential and agricultural), the allocation between the agricultural and non-agricultural components uses acquisition-date proportions, not death-date values. Practitioners must trace the original funding purpose and maintain records sufficient to demonstrate the allocation to HMRC.15

3.3 Layer Three: Discharge Requirement (Section 175A)

Section 175A, also introduced by Finance Act 2013, addresses whether liabilities existing at death are actually discharged from the estate. A liability may be deducted from estate value on death if it is discharged on or after death, out of the estate or from excluded property (s.175A(1)).16

Where a liability remains undischarged, it is deductible only if three cumulative conditions are met: (a) there is a real commercial reason for non-discharge; (b) securing a tax advantage is not the main purpose or one of the main purposes of leaving the liability outstanding; and (c) no other statutory provision prevents the deduction (s.175A(2)).16 A "real commercial reason" means either the creditor is arm's length, or an arm's length creditor would not require discharge (s.175A(3)). "Tax advantage" encompasses relief from tax, avoidance or reduction of tax charges, and delay of assessments, covering income tax, CGT, and IHT (s.175A(5)-(6)).16

A critical trap arises where mortgage protection policies are written in trust. The policy proceeds fall outside the estate, meaning the mortgage cannot be treated as "repaid from the estate" for s.175A purposes -- potentially eliminating the deduction entirely.17 Practical solutions include the executors borrowing against the property to discharge the mortgage, or beneficiaries lending trust policy proceeds to the executors for repayment purposes. A stepped resolution protocol should be followed: first, confirm whether a trust-written policy exists; second, assess whether the estate holds sufficient other assets to discharge the mortgage directly; third, if not, arrange for executors to borrow against the property or for trust beneficiaries to advance the policy proceeds as a loan to the estate.17

The priority ordering rule at s.175A(7) provides that restricted liabilities under ss.162A, 162AA, and 162B are treated as discharged before general liabilities, which has implications for estates with mixed categories of debt.16

3.4 Layer Four: Anti-Avoidance (FA 1986 Section 103)

The oldest restriction layer is FA 1986 s.103, which prevents the artificial creation of deductible liabilities through circular arrangements. Where consideration for a debt consists of property derived from the deceased, the debt is abated proportionately (s.103(1)-(2)). "Property derived from" means assets transferred by the deceased through disposition (s.103(3)-(4)).18

The leading authority is Phizackerley v HMRC [2007] SPC 591. Dr Phizackerley and his wife purchased a house jointly; after severance of the joint tenancy, the wife's will left a nil-rate sum on discretionary trusts with residue to the husband. After the wife's death, the husband purchased her half-share from the discretionary trust for GBP 150,000 (index-linked), giving the trustees an IOU for the purchase price. The Special Commissioner held that the half share was "property derived from the deceased" -- the debt owed by Dr Phizackerley to the trustees was not deductible under s.103.19

The practical lesson for accountants advising on intra-family debt arrangements is clear: where the creditor's consideration for the loan traces back to property originally transferred by the borrower (whether directly or through an intermediate step such as a will trust), s.103 may abate or eliminate the deduction. Section 103 applies to debts incurred on or after 18 March 1986, and life insurance policy liabilities are excluded unless policy proceeds form part of the deceased's estate (s.103(7)).18

4. Residence-Based Regime: Impact on Liability Restrictions

The Finance Act 2025 enacted a fundamental change to the IHT connecting factor, replacing the domicile-based system with a long-term UK resident test from 6 April 2025.3 An individual is a long-term UK resident if they have been UK tax resident for at least 10 of the previous 20 tax years. An IHT "tail" applies after departure from the UK: individuals with 10-13 years of UK residence retain long-term UK resident status for 3 years after leaving, extending to 10 years for those with 20 or more years of residence.20

For the liability restriction framework, this change is consequential. The s.162A restrictions on liabilities financing excluded property now depend on whether the individual is a long-term UK resident, not their domicile status. Property held by a non-long-term UK resident in a non-UK trust is excluded property; property held by a long-term UK resident is within the IHT charge regardless of where situated.321

Practitioners advising internationally mobile clients should reassess existing lending arrangements against the new test. An individual previously classified as non-UK domiciled who has been UK resident for 12 of the past 20 years is now a long-term UK resident, bringing worldwide assets within the IHT charge and potentially removing the excluded property classification from overseas assets financed by UK borrowings. Conversely, an individual who leaves the UK and ceases to be a long-term UK resident after the tail period may find that previously restricted liabilities under s.162A become fully deductible as the financed property regains excluded property status.

HMRC published new guidance at IHTM Chapter 47 covering the long-term UK residence regime, which practitioners should consult alongside the existing IHTM28014-28018 guidance on excluded property liability restrictions.21

5. APR/BPR Reforms and Liability Interaction

From 6 April 2026, the APR/BPR relief framework changes materially. A combined allowance of GBP 2.5 million provides 100% relief on qualifying agricultural and business property, with relief at 50% (an effective 20% IHT rate) on qualifying values exceeding that threshold. AIM-listed shares attract 50% relief only and are excluded from the GBP 2.5 million allowance. Unused allowance is transferable between spouses and civil partners.4

The interaction between s.162B and the capped relief regime requires careful modelling. Under s.162B, borrowings must first reduce the value of qualifying assets before relief applies. Where this reduction brings the qualifying value below the GBP 2.5 million threshold, the cap has no practical effect -- 100% relief applies to the full reduced amount. Where the reduced value exceeds the threshold, the standard two-tier structure operates.

Worked Example A -- Debt Reduces Qualifying Value Below Cap: A farmer holds qualifying agricultural property valued at GBP 3,000,000 with an agricultural mortgage of GBP 800,000. Under s.162B, the mortgage reduces the qualifying value to GBP 2,200,000. Since GBP 2,200,000 falls within the GBP 2.5 million allowance, 100% APR applies to the entire reduced amount. The mortgage has effectively "absorbed" value that would otherwise have exceeded the cap and attracted only 50% relief.

Worked Example B -- Debt Insufficient to Bring Value Below Cap: A farm business holds qualifying property valued at GBP 4,000,000 with a GBP 500,000 loan used for farm building improvements. Under s.162B, the loan reduces qualifying value to GBP 3,500,000. The first GBP 2,500,000 receives 100% relief; the remaining GBP 1,000,000 receives 50% relief, leaving GBP 500,000 chargeable. Absent the loan, GBP 1,500,000 would have exceeded the cap (receiving 50% relief on GBP 1,500,000 = GBP 750,000 chargeable). The s.162B reduction has therefore saved GBP 250,000 of chargeable value -- a GBP 100,000 IHT difference at the 40% rate.414

These examples demonstrate that the interaction between borrowings and the capped relief structure is not straightforward. Practitioners should model each client's position to determine whether existing or planned borrowings improve or worsen the estate's IHT position under the new regime. The extended 10-year interest-free instalment option for qualifying APR/BPR property may also reduce the need for borrowing to fund IHT, affecting debt structuring decisions.4

6. Practical Application: Common Debt Types

6.1 Residential Mortgages

A standard residential mortgage is generally deductible as an encumbrance on the mortgaged property under s.162(4). HMRC accepts mortgage claims at IHT400 box 80 subject to the encumbrance allocation rules.22 Where a mortgage is charged on exempt property (for example, the surviving spouse's share of a jointly owned property), the liability cannot be deducted against chargeable property.22 Multi-property charges require apportionment between the secured assets.

Practitioners should verify whether a mortgage protection policy exists. HMRC directs taxpayers to include policy details at IHT400 box 57. Where the policy is written in trust, the s.175A trap described in Section 3.3 applies.1722

6.2 Equity Release

A lifetime mortgage under an equity release arrangement reduces estate value, with accrued interest also deductible. The arrangement is subject to s.175A scrutiny: where equity release proceeds have been gifted and the donor survives seven years, the potentially exempt transfer is exempt, but the mortgage continues to reduce the estate -- a legitimate planning outcome. HMRC may, however, scrutinise whether the arrangement's main purpose was securing a tax advantage under s.175A(2)(b), particularly where the equity release was taken shortly before death with proceeds immediately gifted.16

6.3 Intra-Family Loans

Loans from friends or relatives receive heightened HMRC scrutiny. IHT419 requires disclosure of the lender's name, their relationship to the deceased, written evidence of loan terms, and an explanation of why the deceased's own funds were not used.10 Where no written agreement exists, HMRC may request details of what was agreed, by whom, and whether third parties can provide statutory declarations.10 The s.103 anti-avoidance provision applies where the loan consideration traces to property derived from the deceased, as illustrated by Phizackerley.1819

6.4 Commercial Borrowings and Guarantees

Commercial overdrafts and credit facilities are generally straightforward: they must be legally enforceable and incurred for consideration, with revolving credit facilities valued at the balance outstanding at the date of death. Guarantee debts, disclosed at IHT419 Part 3, are deductible only to the extent reasonably expected to be called upon -- HMRC investigates the likelihood of enforcement and may restrict deductions for guarantees unlikely to crystallise.9

6.5 Loan Trusts

Loan trusts represent a distinct category that practitioners must differentiate from the liabilities framework discussed above. In a loan trust arrangement, the settlor loans capital to trustees, who invest the funds; investment growth accrues outside the settlor's estate while the outstanding loan capital remains within it.23 The critical distinction is that the outstanding loan is a debt due to the estate -- an asset, not a liability. On death, the loan receivable is reported on form IHT416 (assets held in trust) rather than IHT419 (debts owed by the deceased).23

FA 1986 s.103 does not apply to loan trusts because the loan is advanced by the settlor to the trust, not a debt incurred by the deceased in exchange for property derived from themselves. The settlor created no circular arrangement: the trust received cash and owes a repayment obligation; no property traces back from the trust to the settlor in the manner that engages s.103.1823

The estate planning implication is that loan trust capital neither creates a deductible liability nor engages the four-layer restriction framework. However, the outstanding loan balance affects estate liquidity planning: executors must call in the loan from the trustees to fund IHT liabilities and distributions, which may require the trustees to liquidate investments. Practitioners advising on estates containing loan trusts should coordinate with the trust administrators to ensure timely repayment and avoid delays in obtaining the grant of probate.

7. Reporting and Documentation: The Accountant's Toolkit

7.1 IHT400 and IHT419 Requirements

UK debts and liabilities are reported at IHT400 boxes 79-82. Form IHT419 is the supplementary form required when claiming deductions for loans, overdrafts, or money spent on behalf of the deceased that is to be repaid from the estate. It must also be completed where FA 1986 s.103 may apply.924

HMRC's investigation of IHT419 follows a systematic pattern. For loans from friends or relatives, HMRC requires the lender's name, relationship to the deceased, and written evidence of loan terms.10 Large intra-family loans without written agreements, debts not repaid from the estate, borrowings coinciding with excluded property acquisitions, and disproportionate debt relative to estate value are all recognised enquiry triggers.

7.2 Documentation Best Practices

Practitioners should implement documentation protocols that anticipate HMRC scrutiny:

  • Contemporaneous loan agreements recording the principal amount, interest terms, repayment schedule, and the commercial purpose of the borrowing
  • Evidence of consideration demonstrating that the liability was incurred for money or money's worth as required by s.5(5)
  • Records of fund application tracing how borrowed money was deployed, to establish whether s.162A, s.162AA, or s.162B restrictions apply
  • Evidence of commercial purpose for any liabilities likely to remain undischarged after death, supporting the s.175A "real commercial reason" test
  • Periodic reconciliation of outstanding loan balances against original loan documentation to ensure accurate IHT400 reporting at the date of death

7.3 Discharge Planning

Advisors should address s.175A compliance proactively. Where a trust-written mortgage protection policy prevents the mortgage from being "repaid from the estate," executors may borrow against the property or beneficiaries may loan trust proceeds to the executors for repayment.17 For undischarged commercial debts, maintaining evidence that the creditor is arm's length (or would not require immediate discharge) satisfies the s.175A(3) commercial reason test.16

Conclusion

The deductibility of liabilities for IHT purposes requires practitioners to navigate a systematic framework: identify the liability, confirm legal enforceability and consideration under s.5(5), allocate encumbrances to specific property under s.162(4), and then apply the four restriction layers -- excluded property financing (s.162A), relievable property financing (s.162B), the discharge requirement (s.175A), and the anti-avoidance provisions of FA 1986 s.103.51112141618

The financial consequence of errors is direct: each pound of incorrectly treated debt can cost the estate 40p in additional IHT or expose it to penalties upon investigation. With IHT receipts at record levels, HMRC enforcement escalating, and the April 2026 APR/BPR reforms introducing a GBP 2.5 million cap that amplifies the interaction between borrowings and relievable property, the technical precision demanded of practitioners has never been greater.124

The inclusion of pension death benefits within the IHT estate from April 2027 will increase estate values without creating corresponding deductible liabilities, making existing liability optimisation even more consequential for overall estate tax efficiency.7 Cross-referral protocols remain essential: solicitors should be engaged for loan documentation and trust structuring, while financial advisors address equity release and insurance-based solutions within their regulatory perimeter.

CPD Declaration

Estimated Reading Time: 19 minutes Technical Level: Advanced Practice Areas: Inheritance Tax, Estate Administration, Tax Advisory, Probate Reporting

Learning Objectives

Upon completing this article, practitioners will be able to:

  1. Identify the four layers of restriction that apply to liability deductions for IHT purposes (ss.162A, 162B, 175A IHTA 1984 and s.103 FA 1986)
  2. Apply the s.162B mandatory set-off rule when calculating IHT on an estate containing borrowings used to acquire BPR/APR qualifying assets, including the interaction with the April 2026 GBP 2.5 million cap
  3. Evaluate whether an undischarged liability meets the s.175A "real commercial reason" test for deduction against the estate on death
  4. Analyse the impact of the residence-based IHT regime (from April 2025) on excluded property liability restrictions under s.162A

Competency Mapping

  • ICAEW Code of Ethics: Competence and Due Care (Section 113) -- maintaining technical knowledge of IHT liability deduction rules
  • PCRT Standard 2: Professional Behaviour -- advising clients on the proper application of tax reliefs and deductions
  • ATT Professional Rules and Practice Guidelines: Accurate tax return completion and disclosure

Reflective Questions

  1. How would identification of a trust-written mortgage protection policy during IHT400 preparation change the liability deduction strategy for the estate?
  2. What documentation protocols should be implemented for intra-family loans to ensure deductibility is maintained and HMRC enquiry risk is minimised?
  3. How should the interaction between s.162B and the April 2026 APR/BPR cap influence current estate planning advice for business owner clients with significant borrowings?

Professional Disclaimer

The information presented reflects the regulatory and legislative position as of 2026-02-26. Regulations, tax rules, and professional guidance are subject to change. Readers should independently verify all information before acting and seek advice from appropriately qualified solicitors, financial advisors, or other professionals for their specific circumstances.

Neither WUHLD nor the author accepts liability for any actions taken or decisions made based on the content of this article. Professional readers are reminded of their own regulatory obligations and duty of care to their clients.

Footnotes

Footnotes

  1. UHY Hacker Young / MoneyWeek: Inheritance tax investigations chase 14,000 bereaved families for underpayment (FOI data). https://moneyweek.com/personal-finance/inheritance-tax/inheritance-tax-investigations-underpayment ↩ ↩2 ↩3

  2. HMRC Tax Receipts and National Insurance Contributions Monthly Bulletin. https://www.gov.uk/government/statistics/hmrc-tax-and-nics-receipts-for-the-uk/hmrc-tax-receipts-and-national-insurance-contributions-for-the-uk-new-monthly-bulletin ↩ ↩2 ↩3

  3. Finance Act 2025 c.8 Part 2 Chapter 4 (Inheritance Tax: Long-term UK resident). https://www.legislation.gov.uk/ukpga/2025/8/part/2/chapter/4 ↩ ↩2 ↩3 ↩4

  4. GOV.UK: Agricultural property relief and business property relief changes. https://www.gov.uk/government/publications/changes-to-agricultural-property-relief-and-business-property-relief/agricultural-property-relief-and-business-property-relief-changes ↩ ↩2 ↩3 ↩4 ↩5 ↩6

  5. Inheritance Tax Act 1984 s.5 (Meaning of estate). https://www.legislation.gov.uk/ukpga/1984/51/section/5 ↩ ↩2 ↩3 ↩4 ↩5

  6. GOV.UK: Budget 2025 document. https://www.gov.uk/government/publications/budget-2025-document/budget-2025-html ↩

  7. GOV.UK: Inheritance Tax -- unused pension funds and death benefits. https://www.gov.uk/government/publications/inheritance-tax-unused-pension-funds-and-death-benefits/inheritance-tax-unused-pension-funds-and-death-benefits ↩ ↩2

  8. UHY Hacker Young: HMRC suspects wealthy people underpaid GBP 325m in IHT (FOI analysis). https://www.uhy-uk.com/insights/hmrc-suspects-wealthy-people-underpaid-ps325m-iht-crackdown-likely-2025 ↩

  9. GOV.UK: Inheritance Tax: debts owed by the deceased (IHT419). https://www.gov.uk/government/publications/inheritance-tax-debts-owed-by-the-deceased-iht419 ↩ ↩2 ↩3

  10. HMRC IHTM28321: Investigating form IHT419: obtaining information about loans from friends and relatives. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm28321 ↩ ↩2 ↩3 ↩4

  11. Inheritance Tax Act 1984 s.162 (Liabilities). https://www.legislation.gov.uk/ukpga/1984/51/section/162 ↩ ↩2 ↩3 ↩4

  12. Inheritance Tax Act 1984 s.162A (Liabilities attributable to financing excluded property). https://www.legislation.gov.uk/ukpga/1984/51/section/162A ↩ ↩2 ↩3

  13. HMRC IHTM28011: Restricted deductions: when the provisions apply. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm28011 ↩ ↩2

  14. Inheritance Tax Act 1984 s.162B (Liabilities attributable to financing certain relievable property). https://www.legislation.gov.uk/ukpga/1984/51/section/162B ↩ ↩2 ↩3

  15. HMRC IHTM28020: Borrowed money used to acquire assets that qualify for business relief. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm28020 ↩ ↩2 ↩3

  16. Inheritance Tax Act 1984 s.175A (Discharge of liabilities after death). https://www.legislation.gov.uk/ukpga/1984/51/section/175A ↩ ↩2 ↩3 ↩4 ↩5 ↩6 ↩7

  17. Royal London for Advisers: Deductibility of debts for Inheritance Tax. https://adviser.royallondon.com/technical-central/protection-guidance/inheritance-tax-and-related-manuals/deductibility-of-debts-for-inheritance-tax/ ↩ ↩2 ↩3 ↩4

  18. Finance Act 1986 s.103 (Treatment of certain debts and incumbrances). https://www.legislation.gov.uk/ukpga/1986/41/section/103 ↩ ↩2 ↩3 ↩4 ↩5

  19. Phizackerley v Revenue & Customs [2007] UKSPC SPC00591 (14 February 2007). https://www.familylaw.co.uk/news_and_comment/phizackerley-v-revenue-and-customs-2007-ukspc-spc00591-14-february-2007 ↩ ↩2

  20. KPMG: Inheritance Tax changes from 6 April 2025 -- an update. https://kpmg.com/uk/en/insights/tax/inheritance-tax-changes-from-6-april-2025-an-update.html ↩

  21. HMRC Trusts and Estates Newsletter: April 2025. https://www.gov.uk/government/publications/hm-revenue-and-customs-trusts-and-estates-newsletters/hmrc-trusts-and-estates-newsletter-april-2025 ↩ ↩2

  22. HMRC IHTM28210: Investigating liabilities: mortgages. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm28210 ↩ ↩2 ↩3

  23. M&G Wealth: How does a Loan Trust work? https://www.mandg.com/wealth/adviser-services/tech-matters/iht-and-estate-planning/loan-trust/loan-trust-facts ↩ ↩2 ↩3

  24. HMRC IHTM28010: Restricted deductions: introduction. https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm28010 ↩

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