Pre-death cause of action - Post-death claim

The deceased (a priest) died in prison having been convicted of a criminal offence. The Executors have now received a claim from the insurers of the deceased’s parish in relation to a claim made by a victim of the deceased against the insurers.

My understanding of section 1(1) Law Reform (Miscellaneous Provisions) Act 1934 is that the claim from the insurers against the estate will be a pre-death liability of the estate.

  1. Will HMRC accept this deemed pre-death liability as a liability that reduces the estate value for IHT purposes just like any other pre-death liability? Or are these sort of “pre-death cause of action” liabilities dealt with differently by HMRC?

  2. Presumably explaining the situation in the Additional information section of Form IHT400 will be sufficient, as the value of the claim will not be known for some time?

Many thanks.

Hauke Harrack

I see no reason why it should not form a debt of the estate if the claim succeeds and as you say a suitable note will need to be made in IHT 400.

Patrick Moroney