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HMRC internal manual

Inheritance Tax Manual

Legal rights (Scotland): value for IHT purposes

IHTA84/S42 (4) ensures the correct allocation of exemptions for IHT purposes on a person’s death, where that person’s estate is subject to legal rights (IHTM12221) claims. The value of the legal rights under IHTA84/S42 (4) is the value before deduction of IHT (and administration expenses).

Where a claim to legal rights by the surviving spouse or civil partner (IHTM11032) arises in an estate qualifying for loss on sale of shares (IHTM34010) relief, you should ignore the relief in arriving at the spouse or civil partner’s legal rights claim. This is because legal rights are a debt (IHTM12225) against the estate, which requires to be valued at the death.

The deeming provisions of IHTA84/S179 (2) cannot affect the value of the legal rights claim. These provisions are restricted to their effect to the determination of the ‘tax chargeable on the death in question’.