IHTM28150 | Liabilities: investigating liabilities: income tax

You should check that any deduction claimed for income tax liabilities

• has been calculated correctly, and

• does not indicate that business assets or income-producing assets have not been included in the estate.

In most cases you can accept a deduction for income tax as claimed. But you may need to raise further enquiries if:

• the deduction is large (IHTM28151) in relation to the estate as a whole or inconsistent with what you know about the deceased’s lifestyle

• the liabilities arise as a result of an investigation settlement (IHTM28152)

• the deduction claimed is an estimate (IHTM28153).

You also need to take special care when dealing with deductions claimed for income tax payable on:

• the disposal of an offshore fund (IHTM28154)

• the disposal of deep discount securities (IHTM28155)

• interest bearing securities

• sums received following the discontinuance of a business (IHTM28157)

• the death of a partner in a business (IHTM28158)

• voluntary payments of tax by the personal representatives (IHTM28159)

• the chargeable gains arising when a life insurance policy matures (IHTM28160).