Inheritance Tax Act 1984 section 91

Administration period

Section 91 deals with how inheritance tax treats a beneficiary's interest in the residue of a deceased person's estate during the period of administration, before the estate has been fully wound up.

• A beneficiary entitled to the residue (or a share of it) is treated for inheritance tax purposes as having an interest in possession in the underlying net assets from the date income would have been attributable to them, had the residue been determined immediately after death.
• The unadministered estate comprises all property held by the personal representatives in that capacity, excluding assets subject to specific gifts and assets received other than for paying debts, after allowing for outstanding charges on residue and any capital/income adjustments still to be made.
• Charges on residue include funeral and administration expenses, debts, general and demonstrative legacies, annuities, intestacy entitlements, and other liabilities of the personal representatives — but only to the extent those liabilities ultimately fall on the residue rather than on specifically gifted property.
• In Scotland, charges on residue additionally include sums needed to meet prior rights or legal rights claims by a surviving spouse or civil partner and legal rights claims by children.