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HMRC internal manual

Inheritance Tax Manual

Liability in special cases: heritage property

Where an asset has been conditionally exempted and tax later becomes payable under IHTA84/S32 or IHTA84/S32 A or Sch 5 Paras 1 or 3 because

  • the asset is disposed of
  • the statutory undertaking is not observed
  • the beneficiary dies

the persons liable are specified in IHTA84/S207.  They are

  • on disposal by sale, gift or other than on death - the person by whom or for whose benefit the asset is disposed of (includes the beneficial owner or a trustee or other person who makes a disposal in a fiduciary capacity)
  • on breach of the undertaking or on death - the person who would be entitled to receive (whether for their own benefit or not) the proceeds of sale or any income arising from them if the asset were sold at the time of the breach or immediately after the death.