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HMRC internal manual

Inheritance Tax Manual

Succession: Scottish Prior and Legal rights: Legal rights: Value and estate from which legal rights can be claimed

Legal rights (IHTM12221) are claims in the nature of debts due from a person’s (moveable) estate, which can only be calculated and paid after normal debts, and, if appropriate, the widow(er)’s or surviving civil partner’s (IHTM11032) statutory prior rights, (IHTM12211) have been settled.

The total fund available for the calculation and payment of legal rights is the net moveable estate remaining after the deduction of

  • debts, funeral expenses, Inheritance Tax, administration expenses and similar charges (in so far as these charges are payable out of moveables), and
  • any prior rights on intestacy (IHTM12141) which are to be met out of the moveables.

This is the calculation to determine what will actually be due to be paid to those entitled to legal rights.

When the calculation is for Inheritance Tax purposes on the death of the person whose estate is subject to (or potentially subject to) legal rights claims, no account is taken of

  • any Inheritance Tax liability
  • administration expenses

To this extent the calculation which is usually needed to establish the level of reliefs due, is artificial.

Legal rights are due only from the deceased’s moveable estate. Property over which the deceased had a general power of disposal (IHTM16091) is not subject to legal rights claims, nor is any settled property (IHTM16000) in which the deceased had an interest in possession (IHTM16061).

Jointly owned assets (IHTM15091) can present particular difficulties in the calculation of a person’s entitlement to legal rights. The deceased person’s share of a joint asset may or may not form part of the moveable estate subject to the legal rights claim, depending on how the joint ownership came about and whether or not there were any contractual arrangements.

You should refer any cases of difficulty over what estate is subject to legal rights to Technical for guidance.