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HMRC internal manual

Inheritance Tax Manual

Definition and extent of liability: persons excluded

These are as follows


A purchaser of property and a person deriving title from or under such a purchaser, are excepted from liability under IHTA84/S200 (1)(c) by virtue of IHTA84/S200 (2) unless the property in question is subject to an HMRC charge.


The Board have said that it would not be in accordance with their normal practice to seek to make the nominee company of a clearing or merchant bank, or a Lloyd’s underwriting agent, liable for tax on the property vested in it where the company or agent has parted with the property without notice of the facts giving rise to the tax liability.

Extent of liability

IHTA84/S204 (3) limits the liability of a person who is not liable as a personal representative (IHTM05012) or trustee but who is liable as a person

  • in whom property is vested
  • entitled to a beneficial interest in possession (IHTM16061) in any property.

The liability of such a person is limited to the extent of the property concerned.

Part interests

For the purposes of IHTA84/S200 (1), a person entitled to part only of the income of any property is deemed to be entitled to an interest in the whole of the property. So the whole of the tax attributable to the property can be recovered from any one of the beneficiaries (subject to the limitation above). There is no corresponding provision in IHTA84/S199 or IHTA84/S201.