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HMRC internal manual

Inheritance Tax Manual

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HM Revenue & Customs
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Succession: Wills: Legacies and devises: classification of legacies and devises

These are the different types of legacies and devises that appear in a Will:

Specific legacy

A gift of a particular asset of personal estate such as ‘my gold watch’

Demonstrative legacy

A gift of a general nature directed to be paid out of a particular fund such as ‘£500 out of my 1000 ICI plc ordinary shares’

The distinction between this and a specific legacy is one of intention. Here, if the ICI holding was insufficient at death, either totally or partially, the balance will be paid out of residue.

General legacy

A gift of an item irrespective of whether the deceased owned such an item at death.

A gift of (A) ‘1000 ICI plc ordinary shares’ is a general legacy whereas a gift of (B) ‘my 1000 ICI shares’ or ‘all my ICI shares’ is a specific legacy.

If the testator did not own 1000 ICI shares on death the executors would have to buy them for the beneficiary in case (A) or provide the purchase money instead. But, in case (B) the gift would be adeemed (IHTM12083) if the testator had no such holding at death and so the beneficiary gets nothing.

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Pecuniary legacy

A gift of a sum of money

It may be either:

  • a general legacy, ‘£1,000 to Anne, or
  • a specific legacy, ‘the £1,000 in my Barclays deposit account to Anne’, or
  • a demonstrative legacy ‘£1,000 out of my Woolwich Plc account to Anne’.

Where the testator directs that a devise, bequest or payment is to be taken free of tax this is an additional (pecuniary) benefit given to the beneficiary.

This is why you must gross up (IHTM26001) tax free gifts (where the residue is wholly or partly exempt) in accordance with IHTA84/S38.

A specific pecuniary gift will also arise where the Will provides for a debt owed to the deceased to be forgiven on their death. That debt is cancelled and no longer repayable.

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Devise

A gift of real or immoveable property that is freehold and not leasehold.

A devise of a particular named item of real or immoveable property

A gift of the remainder of the estate after all other legacies and devises and all debts and expenses (including Inheritance Tax) have been paid.