HMRC internal manual

Inheritance Tax Manual

Other deductions from the chargeable estate : dealing with deficits

If the total amount of liabilities on the assets in column A of the IHT400, where tax may be paid by instalments is more than the value of the assets in that section, the excess liabilities should be deducted from the value of the assets in column B, where tax may be paid by instalments.

If the liabilities on instalment option property exceed the assets they should be set against the non-instalment option property The calculations at boxes 83 to 91 of the IHT400 account for the setting off of any deficit, in this way.

If there are still not enough assets to cover the deficit it should be set against any foreign property included on form IHT417.

The deficit cannot be set against (IHTM28397) the value of settled property or joint survivorship property.