Liabilities: law relating to debts: general rules for deducting liabilities against property
In general, debts are deducted against the value of the assets in the deceased’s free estate that do not qualify for the instalment option. The main exceptions are where there are:
- charges (IHTM28392) on any property, such as a mortgage on land, or security is fixed on moveable (personal) property, IHTA84/S162 (4)
- business debts (IHTM28393), or
- foreign debts (IHTM28394)
A liability at any title may only be deducted against the assets at that title. This has implications for carrying forward deficits (IHTM28397) in one part of the estate against another.