PART VI VALUATION

CHAPTER II ESTATE ON DEATH

174 Income tax and unpaid F1inheritance tax.

(1)

In determining the value of a person’s estate immediately before his death, allowance shall be made for—

(a)

any liability for income tax in respect of an offshore income gain, within the meaning of Chapter F2V of Part VII of the Taxes Act 1988, arising on a disposal which is deemed to occur on the death by virtue of section F3757(3) of that Act; and

(b)

any liability to income tax arising under paragraph F44 of Schedule 4 to that Act (deep discount securities) on a disposal which is deemed to occur by virtue of paragraph F57(2) of that Schedule.

(2)

Where in determining the value of a person’s estate immediately before his death a liability for F1inheritance tax is taken into account, then, if that tax or any part of it is not in the event paid out of the estate, the value of the estate immediately before his death shall be treated as increased by an amount equal to that tax or so much of it as is not so paid.