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HMRC internal manual

Inheritance Tax Manual

Definition and extent of liability (PETs): persons excluded

These are outlined below:


A purchaser of property (used in the extended meaning given in IHTA84/S199 (5)) and a person deriving title from such a purchaser are excepted from liability by IHTA84/S199 (3) unless the property in question is subject to an HMRC charge (IHTM30125).


See (IHTM30036).

Extent of liability

IHTA84/S204 (3) governs the extent of liability of persons who

  • are not liable as personal representatives (IHTM05012) under IHTA84/S200 (1)(a) or as trustees
  • but who are liable as persons in whom property is vested or who are entitled to a beneficial interest in possession (IHTM16061) in any property.

Such persons are liable only to the extent of that property.

Where property is settled by the transfer we normally seek to collect the tax from the trustees under IHTA84/S199 (1)(c). Any case in which the taxpayers or their agents contend that the liability of the trustees is restricted by IHTA84/S204 (3) should be referred. (We may wish to argue that the wider provision in IHTA84/S204 (2) applies.)