Liabilities: investigating form IHT419: obtaining information about loans from friends and relatives
If a deduction is claimed for loans due to friends or relatives, the taxpayers should include the following information in box 2 of form IHT419 for each outstanding loan
- the name of the person who lent the money to the deceased and their relationship to the deceased
- the date of the loan, and
- the reason why the loan was made.
Taxpayers are also asked to provide written evidence of the loan and its terms and explain why the deceased’s own money was not used.
In many cases there will be no written evidence and if you wish to investigate the loan (IHTM28322) further you may need to raise an enquiry to ask the taxpayers:
- what was said and agreed at the time the loan was made and by whom
- whether any third parties were present and, if so, whether they would be prepared to make a statutory declaration confirming what was said.