IHT419 Form: Debts Owed by the Estate — Complete Guide 2026

What is IHT419?

IHT419 is the supplementary schedule to the IHT400 used to claim deductions from the gross estate for debts that the deceased owed at the date of death. Deducting these debts gives the net estate — the figure on which inheritance tax is calculated.

The basic principle is simple: the estate inherits not just the deceased's assets, but also their liabilities. Just as the estate must pay off a mortgage before the beneficiaries receive the property, those debts reduce the value available for inheritance — and therefore the IHT due.

Note that IHT419 covers debts other than mortgages, which are deducted on IHT405 (houses and land) directly against the relevant property. IHT419 covers all other liabilities.

Allowable debts

The following debts are generally deductible on IHT419, provided they were genuinely owed at the date of death and are properly documented:

• Unsecured personal loans: Including bank loans, car finance (HP or PCP if there is a negative equity position), and peer-to-peer loans
• Credit card balances: The full outstanding balance at the date of death, not including interest that accrued after death
• Overdrafts: Current account overdrafts (authorised and unauthorised) at the date of death
• Care home fees: Outstanding fees owed to a residential or nursing care provider at the date of death
• Outstanding utility bills: Gas, electricity, water, council tax, telephone bills due at the date of death
• Income tax and other tax liabilities: Tax owed to HMRC for periods before the date of death (the estate's own ongoing tax liability as a result of the death is a separate matter)
• Professional fees outstanding: Solicitor or accountant fees for work done before the death
• Store cards and buy-now-pay-later balances: Any credit arrangements where a balance was outstanding at death

Debts to family members and connected parties

HMRC applies significantly greater scrutiny to debts owed to family members, friends, or connected parties. The concern is that artificial debts could be constructed to reduce the taxable estate without representing genuine liabilities.

To have a family loan accepted as an allowable deduction on IHT419:

• The loan must have been made on commercial terms — there should ideally be a written loan agreement
• There should be evidence of the loan being made — bank transfer records, not just a verbal arrangement
• If interest was charged, there should be evidence that interest was actually paid
• The loan should not appear to have been created in anticipation of death as an IHT avoidance device

HMRC has powers under the Inheritance Tax Act 1984 to disallow debts where they were not created in good faith, or where the repayment obligation was never genuinely enforced. Loans from close relatives that were never demanded back, or that had no set repayment schedule, are at risk of disallowance.

Non-deductible items

The following are not deductible on IHT419:

• Guarantees: Where the deceased guaranteed someone else's loan or overdraft but was not the primary debtor, the guarantee is generally not deductible (unless the primary debtor has defaulted and the estate is actually required to pay)
• Contingent liabilities: Debts that may or may not crystallise in the future — for example, a legal claim that might succeed against the estate. These are contingent and not allowable at the time of the IHT400 submission
• Future bills: Bills that had not been incurred or billed at the date of death — for example, the utility bill for the quarter after death. Only bills that were actually owed at the date of death are deductible
• Disallowed artificial debts: Any debt HMRC determines was created artificially to reduce the taxable estate

How to document debts

For each debt claimed on IHT419, you should obtain a statement from the creditor confirming the balance at the date of death. This is important — the current balance will differ from the date-of-death balance as interest may have accrued and charges may have been applied after the death.

For each debt, note:

• The name of the creditor
• The type of debt (credit card, loan, etc.)
• The account or reference number
• The balance at the date of death
• Whether the debt was in the deceased's sole name or joint

For jointly held debts (such as a joint overdraft), include only the deceased's share — typically 50% unless there is evidence of a different split.

Funeral costs — separate from IHT419

Funeral costs are deductible from the estate for IHT purposes, but they are declared on the IHT400 main form, not on IHT419.

HMRC allows a deduction for reasonable funeral expenses. What is considered reasonable depends on the circumstances, but in 2026 HMRC typically accepts figures in the range of £4,000–£8,000 without question. Higher figures are acceptable where the costs are evidenced and appropriate to the deceased's circumstances.

Allowable funeral costs include:

• Funeral director fees
• Cemetery or cremation fees
• A reasonable headstone or memorial
• Flowers ordered for the funeral
• Death notices in newspapers

Not allowable as funeral costs: a wake or reception held after the funeral (considered a personal cost), or travel costs of family members attending from abroad.

Common mistakes

• Claiming guaranteed debts: The deceased may have guaranteed a child's loan, but unless the primary debtor has defaulted and the estate is obligated to pay, this is not deductible.
• Wrong balance date: Using the current balance from a credit card statement rather than the balance at the date of death. Always request date-of-death figures from the creditor.
• Missing documentation for family loans: Claiming a loan from a family member without being able to evidence it will likely result in HMRC disallowing the deduction and potentially opening a wider enquiry.
• Forgetting care home arrears: If the deceased was in residential care, there may be unpaid invoices for the final weeks or months of residence. These are genuine deductible debts.
• Including future costs: Administration expenses incurred after the date of death — solicitor's fees for the probate, estate agent fees for selling the property — are not debts of the estate for IHT purposes and should not appear on IHT419.

Related guides

• IHT400 form: complete guide to the inheritance tax return
• IHT405: houses, land and buildings