My late client had two loan trusts. I understand that, because the loan had not been repaid, the outstanding loan amount will form part of her taxable estate for IHT purposes (ignoring any growth). No repayments were made during lifetime, so it is the initial loan amount for both loans that needs to be declared.
Please can somebody advise as to the best schedule to include this? IHT419 is for loans that are deducted from the estate, whereas I understand this is an addition to the estate value.
Enter the total value of money:
• thatthedeceasedhadlentpersonallytosomeoneandwhichhadnot
been repaid at the date of death
• whichthedeceasedhadlenttotrusteeslinkedtoalifeassurancepolicy
held in trust
• forwhichthedeceasedheldapromissorynote
• forwhichthedeceasedheldan‘IOU’
• owingtothedeceasedfromadirector’sloanaccountorcurrentaccount
with a company
You’ll need to fill in Schedule IHT416, ‘Debts due to the estate’ to give details of each sum owed to the deceased.
I would suggest Schedule IHT404, which is specifically for Debts and Liabilities.
You’ll need to provide the name of the loan trust and the outstanding amount of the loan at the time of your client’s death. It’s also a good idea to include any relevant documentation to support the information you provide, such as loan agreements or statements.
If you’re still feeling unsure, it may be worth reaching out to a professional advisor, such as a Mortgage Broker Newcastle, who can provide more tailored guidance based on your specific situation. Hope this helps!