112 References in deeds and wills, etc. to death duties

Summary

This section provides how references to:

• legacy and succession duty,
• estate duty, or
• death duties, in general,

contained in documents are to be interpreted.

Details

Where a provision in a document refers to death duties or any death duty to arise on the death of a person occurring on or after the date of the passing of this Act, the following rules apply:

• (a) if the document was executed prior to 31 March 1976, and the reference is to legacy duty and succession duty, it will be read as including inheritance tax (e.g. a pecuniary or specific bequest, free of legacy duty, will mean that the inheritance tax on that bequest will be payable out of the residuary estate);
• (b) if the document was executed prior to 31 March 1976 and the provision refers to estate duty, it will be read as including inheritance tax if such inclusion appears just (e.g. a bequest, free of estate duty, would not be read as including inheritance tax, as the estate duty would be payable out of the residuary estate). On the other hand, a devise of real estate made free of estate duty will be read as including inheritance tax as the devise would have to bear its own estate duty;
• (c) irrespective of when the document was executed, if the provision refers to “death duties”, it will be read as including inheritance tax (e.g. a bequest given “free of all death duties”).

Relevant Date: Finance Act 2015