(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 [F2regulations [F3under section 354(1) of the Taxation (International and Other Provisions) Act 2010], arising on a disposal which is deemed, under such regulations (see regulation 34 of the Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001)), to occur on the death]; and
(b)any liability to income tax arising under [F4[F5Chapter 8 of Part 4 of the Income Tax (Trading and Other Income) Act 2005 (deeply discounted securities)] on a transfer which is treated as taking place by virtue of [F6section 437(2) of that Act].]
(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.
F2Words in s. 174(1)(a) substituted (1.12.2009 with effect as mentioned in reg. 1(2) of the amending S.I.) by The Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001), reg. 125 (with Sch. 1)
F3Words in s. 174(1)(a) substituted (1.4.2010 with effect as mentioned in s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 374, Sch. 8 para. 162 (with Sch. 9 paras. 1-9, 22)
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)
F5Words in s. 174(1)(b) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), ss. 882, 883, Sch. 1 para. 396(a) (with Sch. 2)
F6Words in s. 174(1)(b) substituted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), ss. 882, 883, Sch. 1 para. 396(b) (with Sch. 2)