IHTM28395 - Liabilities: law relating to debts: deducting liabilities where there is excluded property

You will see cases where there is excluded property in the estate and deductions may be properly payable out of both excluded and other property. In this situation, provided the debts are to UK creditors, you may allow a deduction in full against the non-excluded property.

But, in view of IHTA84/S162 (4) this does not apply to debts that are charged on excluded property.