Readers’ forum: How is accrued interest treated for IHT?

I am acting as executor in my personal capacity for an elderly aunt who died recently.

Among her assets is a time deposit that will mature in February 2025. I vaguely recall something about this situation when I studied IHT and taxation of estates years ago but I would appreciate being reminded.

How is the interest accrued up to death treated for IHT and for income tax? I presume that none of it is charged to income tax on the deceased but is it subject to a double charge – once to IHT as part of the value of the estate and once to income tax when it is received? I think that would just be harsh.

Query 20 441 – Puzzled exec.

The interest is taxable when it arises under ITTOIA 2005 s 370.

Puzzled exec is concerned with a time deposit...