The deceased’s flat in the Barbican was to be valued for Capital Transfer Tax. She bought it under right to buy at a substantial discount but subject to a time limited charge for that discount. She died within a year. The flat was subject to a charge to repay all or part of the discount if the flat was assigned within five years of its acquisition. This would not be triggered by an assent to a beneficiary under her will. The executor contended for a valuation of andpound;35,400, deducting the full discount. The Inland Revenue’s valuer contended for a reduced deduction of about andpound;13,000, reflecting his assessment of the likelihood of an actual sale during the remainder of the five-year period. There was a procedural issue as to whether the matter should be determined by the Lands Tribunal or the Special Commissioners.
Held: The case was remitted the case to the Lands Tribunal with a clear direction as to the valuation principle. Its decision would have given some support to the appellant if it had directed that the notional sale of Mrs Alexander’s flat must for valuation purposes be treated as having triggered an immediate liability for the full andpound;24,600 under the Housing Act charge. But that was not the direction. It was that the notional sale should not be treated as triggering the repayment liability, but that the hypothetical purchaser would be in the position of having to pay off the charge if he made an assignment during the remainder of the five-year period.
Judges:
Ralph Gibson LJ, Nicholls LJ
Citations:
(1991) 64 TC
Jurisdiction:
England and Wales
Cited by:
Cited – Grays Timber Products Ltd v Revenue and Customs SC 3-Feb-2010
An assessment to income tax had been raised after the employee resold shares in the company issued through the employees’ share scheme at a price which the Revenue said was above the share value. The company appealed against a finding that tax was . .
Lists of cited by and citing cases may be incomplete.
Inheritance Tax
Updated: 07 October 2022; Ref: scu.396609
