IHTM25112 - Valuing the partnership interest: Income Tax
A deceased partner's Income Tax liability is a personal
liability, not a business liability.
Example
the capital account may be shown as follows:-
| Capital account as at 31.3.02 | £106,510 |
| Add share profit | +78,750 |
| Less income tax | -15,670 |
| Less drawings | - 58,000 |
| £111,590 | |
| Balance at 31.3.02 | £111,590 |
You should check first that the Income Tax liability represents
tax unpaid at the death. If so, add it back to make the capital
account £127,260. You can then accept the Income Tax liability
as an additional liability of the estate unless it is already shown
as a liability at box 82 of form IHT400.
(This text has been withheld because of exemptions in the
Freedom of Information Act 2000)
