Succession: Wills: Legacies and devises: Abatement where there are not enough assets to pay the gifts in full
In this situation the gifts have to abate because there are not enough assets in the estate to meet them in full, even if the Inheritance Tax liability is ignored.
In partly exempt transfer calculations the rule under IHTA84/S37 (1) is that you should use the abated value of each specific gift. In the example at (IHTM12086) this is £20,000.
You should consider the extent of abatement by looking at the situation and values at the date of death and not the actual facts of the administration (which reflect post-death changes and costs).