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HMRC internal manual

Inheritance Tax Manual

From
HM Revenue & Customs
Updated
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Orders under the Inheritance (Provision for Family and Dependants Act) 1975: orders under s.2

Where the Court makes an order under s.2 I(PFD)A 1975

  • for all purposes, including the IHT legislation,
  • the deceased’s will and/or the law relating to intestacy have effect and are deemed to have had effect from the deceased’s death subject to the terms of the order.

IHTA84/S146(1) duplicates and extends that provision in relation to the IHT legislation so that it applies to S.2 orders affecting all parts of the deceased’s wider ‘net estate’ (IHTM35234) as defined for the purposes of the I(PFD)A 1975.

Consequently the extent to which the deceased’s death estate is chargeable or exempt depends on the devolution under the combined effect of the deceased’s will or intestacy and the order of court. If the tax has to be adjusted in consequence of the S.2 court order, the tax underpaid or overpaid does not carry interest from any date earlier than the date of the order.

If the order creates a short-term (not exceeding five years) interest in possession for the benefit of the deceased’s spouse or civil partner (IHTM11032) you should refer the file to TG with a summary of the deceased’s will or intestacy and of the order.

If the order provides for a payment to a spouse or civil partner to be made on a future date, see the instructions at IHTM11092.

Certificates

Unlike IHTA84/S142 and IHTA84/S144, IHTA84/S146 is not mentioned in IHTA84/S239 (4) (IHTM40147). Accordingly you need to take particular care in any case in which

  • additional tax is payable as a result of an order, and
  • a IHTA84/S239 (2) certificate (IHTM40010) has already been issued.

You should refer any such case to your manager before you pursue or abandon the claim for additional tax.