This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

Abatement rules applied to trust loan notes but gifts with reservation rules did not apply

By Mark McLaughlin, June 2023

In a ‘double trust’ arrangement in respect of the family home, the value of loan notes (as a trust liability) was to be taken into account in determining the value of the deceased’s estate, but the loan note liability fell to be abated in its entirety, and the loan notes (as assets) did not form part of the deceased’s estate under the gifts with reservation provisions. 

Summary 

In a ‘double trust’ arrangement in respect of the family home, the value of loan notes (as a trust liability) was to be taken into account in determining the value of the deceased’s estate, but the loan note liability fell to be abated in its entirety, and the loan notes (as assets) did not form part of the deceased’s estate under the gifts with reservation provisions. 

Background 

The deceased (GJP), who died on 31 October 2016, was the principal

Subscribe to the McLaughlin’s Tax Case Library to get instant access
to the Tax Case Library.
14 day free trial , 90 day money back guarantee
Subscribe

Related or similar articles

Gifts did not fall within the exemptions for normal expenditure out of income or gifts to political parties
By Mark McLaughlin, May 2026
Charitable giving condition not satisfied for a reduced rate of IHT to apply
By Mark McLaughlin, November 2024
No IIP in respect of house where insufficient other assets to pay IHT on deceased’s estate
By Mark McLaughlin, March 2023
Beneficial interest in a property was not held by uncle and nephew in equal shares as tenants in common
By Mark McLaughlin, July 2021
Charitable Legacy To Jersey Trust Did Not Qualify For IHT Exemption
By Mark McLaughlin, November 2014