I’m pretty sure that it was always the net interest accrued figure that was added to the account balance to provide the valuation of an account for IHT purposes prior to the date when banks etc no longer had to deduct the income tax at source. I note the Income tax relief for higher rate tax payers pointed out by Malcolm Finney and presume the rationale behind the relief was that it would be unfair to further subject the interest to extra tax once it had been taxed at basic rate and at 40% IHT.
Graeme Lindop
Probate Consultant
Coles Miller Solicitors LLP
