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HMRC internal manual

Inheritance Tax Manual

Who should make the instruments?: income between two deaths

Where an IoV by the beneficiaries of a dead beneficiary is accepted as within IHTA84/S142 (1), the taxpayer may occasionally ask for the income arising from the property concerned between the two deaths (those of H and W in the example at IHTM35042 to be treated also as redirected. The purpose is to increase the reduction in the second estate (that of W in the example). You should deal with such a request as follows

  • if the IoV specifically redirects the income, you should allow a deduction for the net amount of any such income included for IHT purposes in the second estate, but
  • if the IoV is silent about the income and deduction is requested, you should allow it if it is confirmed that the income was actually in the second estate and had not been spent or the subject of another disposition.