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HMRC internal manual

Inheritance Tax Manual

Liabilities: investigating form IHT419: money spent on behalf of the deceased by a close friend or relative

If the taxpayers are claiming a deduction for money spent on the deceased’s behalf they should give the following information in box 1 of form IHT419

  • the name of the person who has spent the money and their relationship to the deceased
  • what the money was spent on
  • why the deceased’s own money was not used, and
  • why the money was not repaid during the deceased’s lifetime.

In general if someone has paid for the deceased’s personal expenditure on milk, groceries and other incidental expenses during the last few months of the deceased’s life you should allow the deduction if claimed. Often, if the deceased is seriously ill during this time it is more convenient to pay for day to day expenses in this way as gaining access to the deceased’s own money may be difficult. But if the deduction claimed is substantial and the lender lived with the deceased you may need to look more closely at expenses of this kind. This is to ensure that the benefit the lender gets out of the purchases is not included as a deduction. You should watch out, for example, for expenditure on household repairs - particularly where the lender is to inherit the property after the deceased’s death.