Policy paper

Inheritance Tax: preventing unintended deductions for liabilities in trust arrangements

This measure will amend the Inheritance Tax rules on liabilities relating to settled property to make sure they operate as intended and provide greater certainty about how liabilities are taken into account for Inheritance Tax purposes.

• From: HM Revenue & Customs
• Published: 28 October 2026

Documents

Inheritance Tax — preventing unintended deductions for liabilities in trust arrangements

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Draft legislation

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Explanatory note

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Details

The measure will prevent liabilities arising from avoidance arrangements from reducing Inheritance Tax charges in ways not intended by Parliament.

It will also introduce rules governing how liabilities properly incurred by trustees are taken into account when valuing settled property for Inheritance Tax purposes, making sure the rules apply consistently and providing greater certainty for taxpayers and HMRC