Does insurance payout form part of estate for IHT purposes?

[state.revenue.contributor]

Mrs X (UK national) died in a road traffic accident abroad. UK executor now brings claim against insurance company of foreign driver abroad. If the insurance pays out, do the proceeds form part of Mrs X's UK estate for IHT purposes?

Thank you in advance for any help.

[maths]

Yes.

Assets of the deceased are included in an estate. A "right" to pursue a claim for compensation is an item of property and therefore is an asset of the estate for IHT.

The value to be included needs to be estimated as best as possible at the date of death (and should be included on Form IHT 205/400).

[state.revenue.contributor]

Yes.

Assets of the deceased are included in an estate. A "right" to pursue a claim for compensation is an item of property and therefore is an asset of the estate for IHT.

The value to be included needs to be estimated as best as possible at the date of death (and should be included on Form IHT 205/400).

Thank you for your reply.

I am just confused as I was told a deceased's estate comprises the assets and liabilities immediately before death. The right to pursue the claim only came into existence on death.

[maths]

You are correct. However, if the value of an estate just before death changes in value due to certain events such events are deemed to have happened just before death (see IHTA 1984 section 171).

I believe a foreign award which arises due to the death (as with a life policy) would be so treated.

[state.revenue.contributor]

You are correct. However, if the value of an estate just before death changes in value due to certain events such events are deemed to have happened just before death (see IHTA 1984 section 171).

I believe a foreign award which arises due to the death (as with a life policy) would be so treated.

Many thanks again.