These are worrying times for everyone but, for executors, the fall in house prices and the reduction in investment values in general are particularly vexing developments.

The Government has refused to give assistance to executors who have to pay Inheritance Tax (IHT) on houses which they have been unable to sell and which have fallen in value since the date of death. IHT is payable on the valuation at the date of death and, once paid, a refund is available if the asset is disposed of within four years at a lower price. However, there is no relief available until such time as the asset is sold.

However, there are steps you can take. Firstly, if shares are sold at a loss within 12 months of the date of death, a claim can be made to reduce the taxable value of the estate by the appropriate amount.

Secondly, if assets have been gifted prior to death (as ‘potentially exempt transfers’) and have been included in the estate valuation for IHT purposes because the donor died within seven years of the gift, a claim may also be made for any reduction in the value of these assets.