(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 [F4Schedule 13 to the Finance Act 1996 (discounted securities) on a transfer which is treated as taking place by virtue of paragraph 4(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.
Textual Amendments
F1 See Finance Act 1986 s. 100(1)and (2)—for any liability to tax arising on and after 25July 1986any reference in the legislation to capital transfer tax has effect as a reference to inheritance tax.
F2Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), Sch. 29, para. 32.Originally
“VII of Part II of the Finance Act 1984”.
F3Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), Sch. 29, para. 32.Originally
“92(3)”.
F4Words in s. 174(1)(b) substituted (29.4.1996 with effect as mentioned in s. 105, Sch. 14 para. 2(2) of the amending Act) by 1996 c. 8, s. 104, Sch. 14 para. 2(1)