IHT and rent free accomodation

[BruceCH]

My Father died some 19 years ago and although he left his estate to his 4 children, he made a provision that his partner be allowed to remain in his house or any other suitable accommodation she preferred until her death. IHT was paid on his estate and his partner preferred to have a flat rather than the house as it was easier for her to maintain. She has recently passed away and her solicitor refuses to return the keys to the property on the basis that her accommodation had a benefit that has to be added to her estate and that we should be liable for any IHT as a result not her beneficiaries. I find it difficult to believe that this is the case. I understand that there was a benefit to her and her estate and thus her beneficiaries, but why are we liable when we have nothing to gain, only getting at last what we were left by our father upon which IHT has already been paid.
BruceCH

[maths]

It would seem that the solicitor is asserting that your father on death created a qualifying interest in possession for his partner (i.e. she was allowed to live in the property pursuant to father's will).

On partner's death the value of the property is treated for IHT as part of her estate on which IHT is charged.

The obligation to discharge the IHT attributable to her interest in possession is that of the "trustees" who are deemed to be the 4 children, not her so-called "free" estate.

[AGoodman]

The tax sounds absolutely right but it still doesn't give him any right to keep the keys (unless he was an executor/trustee of your father's will).

Strictly speaking the trustees will likely be the executors of the will (now known as trustees), whoever they may be, and they will have to pay any IHT liability.

The legal owners of the flat have the right to change the locks and retake possession.

[AGoodman]

And the explanation of "why" is because, for IHT purposes, the flat is treated as part of her estate. Therefore the inheritance tax relating to the flat must be paid from the flat.