Starke and another (Executors of Brown decd) v Inland Revenue Commissioners: CA 23 May 1995

The deceased had owned a site of 2.5 acres on which were built a large farmhouse, and other outbuildings.
Held: The court identified the identify the three separate dimensions to the definition of agricultural property under the Act. The phrase ‘agricultural land’ in section 115(2) did not include buildings, and so the site could not be characterised as agricultural land or pasture. ‘It is as though the draftsman had started with the land and then dealt with what should be treated as going with it’.

Judges:

Morritt L J

Citations:

Gazette 14-Jun-1995, Independent 23-May-1995, [1996] 1 All ER, [1995] STC 689

Statutes:

Inheritance Tax Act 1984 115(2)

Jurisdiction:

England and Wales

Citing:

Appeal fromStarke and Another (Executors of Brown Deceased) v Inland Revenue Commissioners ChD 24-Feb-1994
Mr Brown, the deceased, had owned a site on which was built a substantial farmhouse, with six bedrooms, and various outbuildings. The site formed part of a farm and the issue was whether the site was ‘agricultural land or pasture’ within the meaning . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 21 January 2023; Ref: scu.89503

Walton v Commissioners of Inland Revenue: CA 30 Nov 1995

The court considered the valuation of a farm for Capital Transfer Tax purposes

Judges:

Evans, Peter Gibson, Henry LJJ

Citations:

[1995] EWCA Civ 61, [1996] RVR 55, [1996] 1 EGLR 159, [1996] STC 68, [1996] 21 EG 144, [1996] 21 EG 144

Links:

Bailii

Statutes:

Finance Act 1975 22(1) 23

Jurisdiction:

England and Wales

Inheritance Tax

Updated: 20 December 2022; Ref: scu.577824

Pitt and Another v Holt and Another: ChD 18 Jan 2010

The claimant sought to unravel a settlement she had made as receiver for her late husband, saying that it had been made without consideration of its Inheritance Tax implications. The Revenue said that there was no operative mistake so as to allow the rule in Hastings-Bass to apply allowing the variation.
Held: For the rule to apply, there is no need to identify a breach of duty by trustees or their advisers, and in this case there was no feature which would militate against avoiding the Settlement if it were voidable rather than void. The court had be satisfied that she would not have entered into the Settlement if she had appreciated the inheritance tax consequences rather than merely that she might not have done so.
The claimant’s action had been as receiver, exercising a discretion under the 1983 Act, though she was acting in a fiduciary capacity, and the rule in Hastings-Bass was capable of applying.
It was wrong to reduce the test for Hastings-Bass availability to whether an error in law occurred. The incidence of Inheritance Tax was a matter which should have been considered, and the advisers had taken account of other taxes, and a compliance with section 89 of the 1984 Act would have mitigated the tax as was intended by the section. The settlement could accordingly be set aside under Hastings-Bass, though not under the law of mistake.

Judges:

Robert Englehart QC J

Citations:

[2010] EWHC 45 (Ch), [2010] STC 901, [2010] STI 1443, [2010] WTLR 269, [2010] BTC 235, (2010) 12 ITELR 807, [2010] 1 WLR 1199, [2010] 2 All ER 774

Links:

Bailii, Times

Statutes:

Inheritance Tax Act 1984 89, Mental Health Act 1983 94 99(2)

Jurisdiction:

England and Wales

Citing:

CitedRe Hastings-Bass; Hastings v Inland Revenue CA 14-Mar-1974
Trustees of a settlement had exercised their power of advancement under the section, in order to save estate duty by transferring investments to be held on the trusts of a later settlement. However the actual effect of the advancement was that the . .
CitedByng v London Life Association CA 1990
The venue selected for a meeting of the members of a company was too small to accommodate all the members who attended, and so the chairman adjourned the meeting to an alternative venue.
Held: The decision by the chairman was set aside on the . .
CitedMettoy Pension Trustees v Evans ChD 1990
Where a trustee acts under a discretion given to him by the terms of the trust the court will interfere with his action if it is clear that he would not have so acted as he did had he not failed to take into account considerations which he ought to . .
CitedOgden and Another v Trustees of the RHS Griffiths 2003 Settlement and others; In Re Griffiths deceased ChD 25-Jan-2008
A life-time transfer which had been made under a mistake as to the donor’s chances of surviving long enough for the transfer to be exempt from Inheritance Tax was set aside. Unbeknown to the donor, he had lung cancer at the time.
Held: Lewison . .
CitedSieff v Fox ChD 23-Jun-2005
The advisers to trustees wrongly advised the trustees about the tax consequences of exercising a power of appointment in a certain way. As a result a large unforeseen Capital Gains Tax liability arose. The trustees sought to set aside the . .
CitedWolff v Wolff ChD 6-Sep-2004
The court considered its ability to redraw a document where its legal effect was misunderstood. . .
CitedEdge and others v Pensions Ombudsman and Another CA 29-Jul-1999
The Pensions Ombudsman was wrong to set aside the decision of pensions trustees where that decision was properly made within the scope of a discretion given to the Trustees. He should not carry out an investigation where no particular benefit could . .
CitedHunter v Senate Support Services Ltd and others ChD 2005
The court set aside a forfeiture of shares for non-payment of a call. The decisions of the directors to forfeit the shares and to transfer the forfeited shares to the group holding company were flawed, though not improperly motivated, because the . .
CitedAbacus Trust Company (Isle of Man) Colyb Limited v Barr, Barr, and Barr ChD 6-Feb-2003
The court considered the Rule in Hastings-Bass, and specifically (1) whether the trustee’s decision is open to challenge when the failure to take a consideration into account is not attributable to a breach of fiduciary duty on the part of the . .
CitedEquitable Life Assurance Society v Hyman HL 20-Jul-2000
The directors of the Society had calculated the final bonuses to be allocated to policyholders in a manner which was found to be contrary to the terms of the policy. The language of the article conferring the power to declare such bonuses contained . .
CitedGibbon v Mitchell ChD 1990
G executed a deed surrendering his life interest in a trust fund in order to vest the property in his two children: the deed did not have that effect because of two errors (one of which was ignoring the fact that his life interest was subject to . .
CitedAnker-Petersen v Christensen ChD 2002
Where a mistake is made as to the effect of an appointment under a trust it may be possible to invoke the court’s jurisdiction to rescind the appointment. Davis J considered Millett J’s distinction between ‘effect’ and ‘consequences’: ‘An example in . .
CitedStannard v Fisons Ltd; Stannard v Fisons Pensions Trust CA 2-Jan-1990
The purchaser of a business said that the company had made insufficient contributions to its pensions fund before the transfer, and sought payment of the sums underpaid. The defendants argued that, applying Hastings-Bass, unless that principle were . .
CitedBurrell and Sharman v Burrell, Shore, Tyrrell, etc ChD 23-Feb-2005
Shares were appointed by trustees in the mistaken belief that they attracted business property relief from Inheritance tax. They sought to set aside the appointment.
Held: Mann J applied the rule in Stannard v Fisons Pensions Trust and . .
CitedOgilvie v Littleboy CA 1897
Lindley LJ discussed the variation of a gift for mistake: ‘Gifts cannot be revoked, nor can deeds be set aside, simply because the donors wish they had not made them and would like to have back the property given. Where there is no fraud, no undue . .
CitedLady Hood of Avalon v Mackinnon 1909
Lady Hood made an appointment in favour of her elder daughter, in order to place her in the same position as her younger daughter to whom she had already made large appointments. But in doing so she (and her solicitor) had forgotten that she had, . .

Cited by:

CitedFutter and Another v Futter and Others ChD 11-Mar-2010
Various family settlements had been created. The trustees wished to use the rule in Hastings-Bass to re-open decisions they had made after receiving incorrect advice.
Held: The deeds were set aside as void. The Rule in Hastings-Bass derives . .
Appeal FromPitt and Another v Holt and Another CA 9-Mar-2011
. .
At First InstanceFutter and Another v Revenue and Customs; Pitt v Same SC 9-May-2013
Application of Hastings-Bass Rule
F had created two settlements. Distributions were made, but overlooking the effect of section 2(4) of the 2002 Act, creating a large tax liability. P had taken advice on the investment of the proceeds of a damages claim and created a discretionary . .
Lists of cited by and citing cases may be incomplete.

Trusts, Inheritance Tax

Updated: 07 December 2022; Ref: scu.401868

Shelford and Others v Revenue and Customs (Inheritance Tax – Avoidance – ‘Home Loan Scheme’): FTTTx 27 Jan 2020

INHERITANCE TAX – avoidance – ‘home loan scheme’ – purported sale of house to interest-in-possession trust – mislabelled agreements – validity of sale – s2 Law of Property (Miscellaneous Provisions) Act 1989 – s163 Inheritance Tax Act 1984

Citations:

[2020] UKFTT 53 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Inheritance Tax

Updated: 27 November 2022; Ref: scu.649146

Banks v Revenue and Customs: UTTC 1 Apr 2020

INHERITANCE TAX – exemption for gifts to political parties – s 24 Inheritance Tax Act 1984 – gift to UK Independence Party not within scope of exemption – whether breach of European Convention on Human Rights – whether breach of European Union law

Citations:

[2020] UKUT 101 (TCC)

Links:

Bailii

Jurisdiction:

England and Wales

Inheritance Tax

Updated: 20 November 2022; Ref: scu.650140

Matthews v Revenue and Customs: FTTTx 30 Aug 2012

INHERITANCE TAX – death – estate passing on death – deposit account in joint names of deceased and her son – whether deceased had general power to dispose of whole account – yes – whether deceased made gift with reservation – yes – whether whole balance on account subject to inheritance tax – yes – appeal dismissed.

Citations:

[2012] UKFTT 658 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Inheritance Tax

Updated: 13 November 2022; Ref: scu.466114

Buzzoni and Others v HM Revenue and Customs – FTC/57-59/2011: UTTC 19 Oct 2012

UTTC Whether s. 102(1)(b) of the Finance Act 1986 (gift with reservation) applies to a gift of a reversionary underlease containing covenants from the donee mirroring covenants in the donor’s head lease. Application of Ingram v. IRC. Decision of the First-tier Tribunal upheld: such covenants do constitute a reservation within the section.

Citations:

[2012] UKUT 360 (TCC)

Links:

Bailii

Statutes:

Finance Act 1986 102(1)(b)

Jurisdiction:

England and Wales

Citing:

Appeal fromBuzzoni and Others v Revenue and Customs FTTTx 21-Apr-2011
FTTTx INHERITANCE TAX – grant of future underlease – covenants reserved – whether donor excluded or virtually excluded – appeal dismissed . .

Cited by:

Appeal fromBuzzoni and Others v Revenue and Customs, Re The Estate of Lia Kamhi (Deceased)) CA 19-Dec-2013
. .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax, Landlord and Tenant

Updated: 10 November 2022; Ref: scu.466700

Frankland v Commissioners of Inland Revenue: CA 7 Nov 1997

Shares which were transferred within the first tax quarter after a death lost the benefit of Inheritance Tax exemption on their transfer into a discretionary trust.

Judges:

Peter Gibson, Thorpe, Chadwick LJJ

Citations:

Times 02-Dec-1997, [1997] EWCA Civ 2674, [1997] STC 1450, [1997] BTC 8045

Links:

Bailii

Statutes:

Inheritance Tax Act 1984 144

Jurisdiction:

England and Wales

Citing:

CitedCape Brandy Syndicate v Inland Revenue Commissioners CA 1921
Rowlatt J said: ‘In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied’ and . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 10 November 2022; Ref: scu.80660

Charnley and Others v Revenue and Customs (Inheritance Tax : Business : Agricultural Reliefs): FTTTx 28 Oct 2019

INHERITANCE TAX – Agricultural property relief – Business property relief – whether dwelling was a farmhouse – nexus between farmhouse and land – agricultural purposes – whether business wholly or mainly consisted of holding investments – appeal allowed

Citations:

[2019] UKFTT 650 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Inheritance Tax

Updated: 09 November 2022; Ref: scu.644024

Ingram and Palmer-Tomkinson (Executors of the Estate of Lady Jane Lindsay Morgan Ingram Deceased) v Commissioners of Inland Revenue: CA 28 Jul 1997

The deceased had first conveyed property to her solicitor. Leases back were then created in her favour, and then the freeholds were conveyed at her direction to her children and grandchildren. They were potentially exempt transfers.
Held: (Millett LJ dissenting) The conveyance to the solicitor left the solicitor holding the property as bare trustee for the deceased. It was not possible for such a trustee then to create effective leases in favour of the beneficiary of that trust. Transactions allowing transfer and leaseback of house were ineffective to avoid Inheritance Tax; since there had been a benefit reserved.
Millett LJ observed that for overreaching purposes there must be not merely two parties to the transaction but two independent parties who are capable of dealing with each other at arm’s length.

Judges:

Lord Justice Nourse, Lord Justice Evans And Lord Justice Millett

Citations:

Times 11-Sep-1997, Gazette 10-Sep-1997, [1997] EWCA Civ 2212, [1997] 4 All ER 395, [1997] STC 1234

Statutes:

Finance Act 1986 102(1)

Jurisdiction:

England and Wales

Citing:

Appeal fromIngram and Another v Inland Revenue Commissioners ChD 23-May-1995
Lady Ingram had first conveyed properties to her solicitor who on the next day let the properties back to her, and on the day after conveyed the freehold of the properties to her family.
Held: The leases in favour of Lady Ingram, having been . .
CitedRye v Rye HL 1962
Two brothers were in partneship in unequal shares, but acquired a property for use by the business which they held in equal shares. They agreed a parol yearly tenancy between themselves as owners and as partners. After one died his son took over his . .
MentionedAttorney General v Earl Grey QBD 1898
. .
MentionedAttorney General v Earl Grey CA 2-Jan-1898
The court considered the effectiveness of a gift from father to son for estate duty purposes, where the revenue said that the father had reseved an interest in the land to himself. The conveyance to the defendant donee contained the following . .
MentionedGrey (Earl) v Attorney General HL 1900
The donor conveyed land to his son by way of gift but reserved an annual rentcharge during his life which was charged on the land conveyed and which his son covenanted to pay (together with the other liabilities of the donor), and retained the right . .
CitedRe Cochrane 1905
(High Court of Ireland) The court considered the effectivenmess of a gift with a reservation to the donor, distinguishing Earl Grey: ‘The limitation of this annuity, although prior to the gift, was, as well as being charged on the land, secured by . .
CitedKildrummy (Jersey) Ltd v Inland Revenue Commissioners IHCS 1990
It was not possible in Scottish law for a man to grant a lease to a nominee for himself: (Lord Hope) ‘I have, as I have said, no difficulty in the concept by which the title to property and the beneficial interest are separated, the title being held . .
CitedSt Aubyn v Attorney General HL 12-Jul-1951
The donor exercised powers of appointment ‘to make some part of the settled property his own’, and it was ‘wholly irrelevant that by a contemporaneous or later transaction he surrenders his life interest in other parts of it’. The different parts of . .
MentionedCommissioner for Stamp Duties of New South Wales v Perpetual Trust Company Ltd PC 1943
(Australia) The court considered reservation of benefit rules. Under the settlement the trustees were required to hold certain company shares, to apply the income for the maintenance of the settlor’s son during his minority, and to transfer the . .
CitedRe Cochrane CA 1906
(Court of Appeal of Ireland) The court considered the effectivenmess of a gift with a reservation to the donor. As to the Earl Grey case, if ever there was a case to which the statute applied it was The Attorney-General v Grey. The court referred to . .
CitedAdvocate (HM) v M’Taggart Stewart 1906
. .
CitedMunro v Commissioner for Stamp Duties PC 1933
In 1909, the deceased orally agreed with his six children that he and they would carry on the business of graziers on land owned by him as partners under a partnership at will. In 1913 the deceased transferred by way of gift the freehold interest in . .
CitedLang v Webb 1912
(High Court of Australia) In 1908 the deceased had transferred and conveyed a piece of land to each of her three sons; on the same date as, but subsequently to, the execution of the transfers and conveyances there had been executed by the deceased . .
CitedCommissioner of Stamp Duties of New South Wales v Perpetual Trustee Co Ltd PC 1943
The Board consideerd the application of the retention of benefit rules. Lord Russell of Killowen said: ‘the entire exclusion of the donor from . . enjoyment which is contemplated . . is entire exclusion from . . enjoyment of the beneficial interest . .
CitedOakes v Commissioner of Stamp Duties of New South Wales PC 1953
oakes_csdnswPC1954
A father made a gift of land in favour of himself and his four children in equal shares but then retained wide powers of management for which he reserved the right to charge remuneration.
Held: The donor was entirely excluded from the . .
CitedWalsh v Lonsdale CA 1882
Lonsdale purported to grant to Walsh a seven year lease with rent payable in advance. The lease was not embodied in a deed, and when Walsh went into possession, an annual tenancy with rent payable in arrear was created. Walsh did not pay in advance, . .
CitedLang v Webb 1912
(High Court of Australia) In 1908 the deceased had transferred and conveyed a piece of land to each of her three sons; on the same date as, but subsequently to, the execution of the transfers and conveyances there had been executed by the deceased . .
CitedFaulkner v Lowe 1848
A covenant by one person with himself and other was senseless. . .
CitedHenderson v Astwood PC 1894
A sale was undertaken by a mortgagee, ostensibly to a third party but in reality to his nominee. The land was conveyed by the mortgagee to his nominee, who executed a declaration that he held the land in trust for the mortgagee, and who subsequently . .
CitedW T Ramsay Ltd v Inland Revenue Commissioners HL 12-Mar-1981
The taxpayers used schemes to create allowable losses, and now appealed assessment to tax. The schemes involved a series of transactions none of which were a sham, but which had the effect of cancelling each other out.
Held: If the true nature . .
CitedRegent Oil Co Ltd v JA Gregory (Hatch End) Ltd CA 1966
No general distinction is to be drawn between the two types of mortgage and sub-mortgage. The court considered the practice for a mortgagor to attorn tenant to his mortgagee. The tenancy contained no covenants and was merely a device to give the . .
CitedLewis v Hillman 1852
A sale by a sole trustee to his nominee posing as a bona fide purchaser was held to be incapable of overreaching the interests of the beneficiaries. It was ‘powerless for that purpose’. . .
CitedIngle v Richards (No 1) 1860
. .
CitedRe George Whichelow Ltd; Bradshaw v Orpen 1953
A mother had left shares her in a company to three daughters for life with remainder to their children who should attain 21. The three daughters and their children directed the trustees to appoint the eldest of the daughters as their proxy, or to . .
CitedIn Re Brockbank 1948
A new trustee was to be appointed. The beneficiaries, all of full age and capacity wanted the remaining trustee to appoint someone they nominated. The trustee purported to exercise the discretion given to him in the trust deed and appointed someone . .
CitedHirachand Punamchand v Temple CA 1911
The defendant, a British army officer in India, had given a promissory note to the plaintiff moneylenders. Unable to pay, he suggested they apply to his father, Sir Richard Temple. In reply, Sir Richard Temple’s solicitors wrote saying they were . .
CitedBelaney v Belaney 1867
The testator bought the residue of a 99 year lease and took an assignment of the term. In the following year he bought the freehold reversion and, by a deed which recited that he was desirous that the term should not merge in the freehold, the . .
CitedFarrer v Farrer’s Ltd 1888
A sale by a mortgagee to a company of which he was a director and shareholder was held to be effective to extinguish the equity of redemption, but only because the sale was negotiated between the mortgagee and the other directors at arms’ length. A . .
CitedWilliams v Scott PC 1900
(New South Wales) The Board was asked whether an abstract of title was good because it appeared from the abstract that there had been a purchase by a trustee without full consent or release from the beneficiaries.
Held: The purchase of trust . .
CitedAttorney General v Worrall CA 1895
The donor gave his son the benefit of a debt of about andpound;24,000 which was owing to him, in return for which the son covenanted to pay the father an annuity of andpound;735 p.a. during his life.
Held: ‘It has been held that in cases of . .
CitedSt Edmundsbury and Ipswich Diocesan Board of Finance v Clark (No.2) CA 1973
When looking at a contract ‘one must construe the document according to the natural meaning of the words contained in the document as a whole, read in the light of surrounding circumstances.’
The contra preferetem rule can only come into play . .
CitedCommissioners of Inland Revenue v McGuckian HL 21-May-1997
Steps which had been inserted into a commercial transaction, but which had no purpose other than the saving of tax are to be disregarded when assessing the tax effect of the scheme. The modern approach to statutory construction is to have regard to . .
CitedGreyv Ellison 1856
A policy of insurance was created in which one department of an insurance company purported to effect a contract with another department of the same company. Although different individuals were parties to the contract, they all contracted as agents . .

Cited by:

Appeal fromIngram and Another v Commissioners of Inland Revenue HL 10-Dec-1998
To protect her estate from Inheritance Tax, the deceased gave land to her solicitor, but then took back a lease. The solicitor then conveyed the land on freehold on to members of her family.
Held: The lease-back by the nominee was not void as . .
CitedHSBC Bank Plc v Dyche and Another ChD 18-Nov-2009
The parties disputed the claimed beneficial interest of the second defendant. The second defendant (C) said that it had been purchased for him by the first defendant (D) from C’s trustee in bankruptcy, and was thereafter held in trust for him on the . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax, Trusts

Updated: 09 November 2022; Ref: scu.142609

Banks v Revenue and Customs (Inheritance Tax : Human Rights): FTTTx 15 Oct 2018

Exemption from IHT for gifts to political parties – section 24 Inheritance Tax Act 1984 – whether breach of European Convention on Human Rights – whether breach of European Union law

Citations:

[2018] UKFTT 617 (TC), [2019] SFTD 304, [2019] STI 214

Links:

Bailii

Jurisdiction:

England and Wales

Inheritance Tax, Human Rights

Updated: 24 October 2022; Ref: scu.632331

Thomas, The Estate of v Revenue and Customs (Tax – Inheritance Tax – Agricultural Land): UTLC 10 Jan 2020

TAX – INHERITANCE TAX – agricultural land – valuation under s.190 Inheritance Act 1984 – whether best consideration achieved – residual valuation method – comparable method preferred – best consideration determined at pounds 645,000

Citations:

[2020] UKUT 6 (LC)

Links:

Bailii

Jurisdiction:

England and Wales

Inheritance Tax

Updated: 22 October 2022; Ref: scu.647075

Alexander v Inland Revenue Commissioners: CA 1991

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:

CitedGrays 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

Inland Revenue Commissioners v Eversden and Another: ChD 10 Jul 2002

A settlor had created a discretionary trust in favour of her husband. The Commissioners sought to apply the reservation of benefit provisions.
Held: The settlor’s retained entitlement as a discretionary beneficiary did constitute a reservation of interest within section 102(3). However, the exemption from Inheritance Tax in favour of transfers between spouses had overriding effect, so that the rules taxing gifts with a reservation of benefit for the donor did not apply. Whether a gift was an exempt transfer was determined at the time of the gift, and was a for once and for all assessment.

Judges:

Mr Justice Lightman

Citations:

Times 18-Jul-2002, Gazette 19-Sep-2002, [2002] EWHC 1360 (Ch), [2002] WTLR 1013, [2002] BTC 8035, [2002] STI 1008, [2002] NPC 96, [2002] STC 1109

Links:

Bailii

Statutes:

Inheritance Tax Act 1984 18 102(3)

Jurisdiction:

England and Wales

Citing:

CitedIngram and Another v Commissioners of Inland Revenue HL 10-Dec-1998
To protect her estate from Inheritance Tax, the deceased gave land to her solicitor, but then took back a lease. The solicitor then conveyed the land on freehold on to members of her family.
Held: The lease-back by the nominee was not void as . .

Cited by:

Appeal fromCommissioners of Inland Revenue v Eversden Eversden (As Executors of the Will of Greenstock Deceased) CA 15-May-2003
The executors challenged the assessment to Inheritance tax on the estate. The commissioners claimed that a gift of property into a trust included a sufficient reservation of benefit to disallow it as an exempt transfer.
Held: The scheme was . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 01 October 2022; Ref: scu.174446

Green and Another v Inland Revenue: ChD 11 Jan 2005

The deceased died intestate and with a negative valued personal estate, but with assets in trusts, including a revocable life interest in property. The question was whether his debts could be set off against the trusts interests to reduce them below the limit.
Held: The literal approach in Cape Brandy had now been superceded by a purposive interpretation of taxation statutes as in McGuckian, and ‘there is nothing inherently illogical or contrary to that purpose in allowing personal liabilities to be used to reduce the overall (aggregated) estate because it might be said that that is consistent with the aggregation mechanism that Parliament chose. The statute has created its own logical world by deeming trust property to be owned by the deceased. ‘ Nevertheless, the court was bound by Re Barnes, and the debts could not be set off.

Judges:

Mann J

Citations:

[2005] EWHC 14 (Ch), [2005] 1 WLR 1772

Links:

Bailii

Statutes:

Inheritance Tax Act 1984 222

Jurisdiction:

England and Wales

Citing:

CitedCape Brandy Syndicate v Inland Revenue Commissioners CA 1921
Rowlatt J said: ‘In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied’ and . .
CitedCommissioners of Inland Revenue v McGuckian HL 21-May-1997
Steps which had been inserted into a commercial transaction, but which had no purpose other than the saving of tax are to be disregarded when assessing the tax effect of the scheme. The modern approach to statutory construction is to have regard to . .
CitedRe Barnes 1939
A gift was made within three years of death. Under estate duty law it fell to be treated as property passing on the death. The deceased’s estate was heavily insolvent with a deficit of over andpound;90,000 and the executrix claimed that the . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 27 September 2022; Ref: scu.220992

Wolff v Wolff: ChD 6 Sep 2004

The court considered its ability to redraw a document where its legal effect was misunderstood.

Judges:

Mann J

Citations:

[2004] EWHC 2110 (Ch), [2004] STI 2068, [2004] WTLR 1349, [2004] STC 1633, [2009] BTC 8017, [2004] NPC 135

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

CitedPitt and Another v Holt and Others ChD 18-Jan-2010
The deceased had created a settlement in favour of his wife. He suffered serious injury and placed the damages in trust, but in a form which created an unnecessary liability to Inheritance Tax on his death. The wife’s mental health act receiver now . .
CitedPitt and Another v Holt and Another ChD 18-Jan-2010
The claimant sought to unravel a settlement she had made as receiver for her late husband, saying that it had been made without consideration of its Inheritance Tax implications. The Revenue said that there was no operative mistake so as to allow . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax, Landlord and Tenant

Updated: 25 September 2022; Ref: scu.231585

The Perpetual Executors and Trustees Association of Australia Limited v The Commissioner of Taxes of The Commonwealth of Australia: PC 19 Jan 1954

Australia – The executors appealed against an assessment to (Australian) Estate Duty.

Judges:

Oaksey, Morton of Henryton, Reid, Asquith of Bishopstone, Cohen LL

Citations:

[1954] UKPC 4, [1954] 2 WLR 171, [1954] TR 29, (1954) 47 R and IT 293, (1954) 33 ATC 30, [1954] 1 All ER 339, [1954] AC 114

Links:

Bailii

Jurisdiction:

Australia

Inheritance Tax

Updated: 22 September 2022; Ref: scu.445867

Inland Revenue v Arkwright and Another: ChD 16 Jul 2004

The deceased and his wife had held their property as tenants in common in equal shares. The Special Commissioner had assessed the interest of the deceased in the property at less than one half of the vacant possession value.
Held: It was not part of the commissioner’s job to reach any conclusion as to the value of the deceased’s interest. Whether a purchaser would take into account the surviving wife’s interests in setting his bid, was also a matter for the Lands Tribunal to decide upon proper evidence.

Judges:

Gloster J

Citations:

[2004] EWHC 1720 (Ch), Times 04-Aug-2004, [2005] 1 WLR 1411

Links:

Bailii

Statutes:

Inheritance Tax Act 1984 161 225, Special Commissioners (Jurisdiction and Procedure) Regulations 1994 (1994 No 1811) 23

Jurisdiction:

England and Wales

Inheritance Tax, Taxes Management

Updated: 29 August 2022; Ref: scu.199376

Attorney General v Earl Grey: CA 2 Jan 1898

The court considered the effectiveness of a gift from father to son for estate duty purposes, where the revenue said that the father had reseved an interest in the land to himself. The conveyance to the defendant donee contained the following clause: ‘the said Earl Grey did convey to the defendant . . all his real estate other than the mansion house and the appurtenances, to the use that the said Earl Grey should thenceforth during his life receive an annual rent-charge of 4000L to be issuing out of the said hereditament, and subject thereto to the use of the defendant in fee simple.’ This was held to reserve a benefit to the settlor. Rigby LJ: The reservation of the rentcharge and the son’s covenant to pay it were ‘so plain as to require no further notice.’
Vaughan Williams LJ said: ‘the son’s covenant to pay the donor’s debts was a sufficient reservation of a benefit, but such a benefit was ‘totally different from the prior estate created by the use in respect of the rentcharge, and I mention this because I am inclined to agree with the appellant that the rentcharge must be treated as something entirely outside the gift.’

Judges:

A.L.Smith LJ, Rigby LJ, Vaughan Williams LJ

Citations:

[1898] 2 QB 534

Jurisdiction:

England and Wales

Citing:

Appeal fromAttorney General v Earl Grey QBD 1898
. .

Cited by:

Appeal fromGrey (Earl) v Attorney General HL 1900
The donor conveyed land to his son by way of gift but reserved an annual rentcharge during his life which was charged on the land conveyed and which his son covenanted to pay (together with the other liabilities of the donor), and retained the right . .
MentionedIngram and Palmer-Tomkinson (Executors of the Estate of Lady Jane Lindsay Morgan Ingram Deceased) v Commissioners of Inland Revenue CA 28-Jul-1997
The deceased had first conveyed property to her solicitor. Leases back were then created in her favour, and then the freeholds were conveyed at her direction to her children and grandchildren. They were potentially exempt transfers.
Held: . .
CitedIn re Nichols, deceased CA 2-Jan-1975
The father, Lord Nichols, gave property to his sons who then leased it back to him. On the father’s death the revenue claimed duty.
Held: Goff LJ: ‘Having thus reviewed the authorities, we return to the question what was given, and we think . .
CitedSt Aubyn v Attorney General HL 12-Jul-1951
The donor exercised powers of appointment ‘to make some part of the settled property his own’, and it was ‘wholly irrelevant that by a contemporaneous or later transaction he surrenders his life interest in other parts of it’. The different parts of . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 31 July 2022; Ref: scu.223758

McCall and Another v HM Revenue and Customs: CANI 25 Feb 2009

The deceased had inherited grass land from her husband. It had planning permission for development. The personal representatives appealed against a finding that relief was not available as a relevant business property.

Judges:

Girvan LJ, Coghlin LJ and Deeny J

Citations:

[2009] NICA 12, [2009] STC 990, [2009] STI 1124, [2009] BTC 8059

Links:

Bailii

Statutes:

Inheritance Tax Act 1984 104

Cited by:

CitedHM Revenue and Customs v A M Brander As Exec of The Will of The Late Fourth Earl of Balfour UTTC 16-Aug-2010
UTTC Inheritance tax – Exempt transfers and relief – Business property relief Replacement property – Deceased having liferent interest in family estate – Deceased declared to be fee simple proprietor of the . .
Lists of cited by and citing cases may be incomplete.

Northern Ireland, Inheritance Tax, Agriculture

Updated: 25 July 2022; Ref: scu.343911

Re Philipson-Stow: HL 1961

The section excluded from liability for estate duty property ‘passing on the death which is situate out of Great Britain if it is shown that the proper law regulating the devolution of the property situate, or the disposition under or by reason of which it passes, is the law neither of England nor of Scotland.’ Issues relating to a disposition of movables must be determined according to the law of the country of domicile of the deceased at the date of his death. The proper law ‘regulating’ a disposition of immovable property for the purposes of section 28(2) was the lex situs.
Lord Denning confirmed that the question of interpretation depends upon the intention of the testator: ‘We are dealing with a will: and, whilst I would agree that the construction of a will depends on the intention of the testator, I would say that in no other respect does his intention determine the law applicable to it.
Let me take first the case where there is a disposition of movable property by will. There is no doubt that the proper law regulating the disposition of movables is the law of the domicile of the testator at the time of his death. In the leading case on this subject Lord Carnworth used the word ‘regulate’ in this very connection. When a person dies domiciled abroad, he said, ‘in every case the succession to personal property will be regulated not according to the law of this country but to that of his domicile’: see Enohin v Wylie. There is perhaps an exception in regard to the construction of his will: for if a question arises as to the interpretation of the will and it should appear that the testator has changed his domicile between making his will and his death, his will may fall to be construed according to the law of his domicile at the time he made it: though in all other respects it would be governed by the law of his domicile at the date of his death.’

Judges:

Lord Reid, Lord Denning

Citations:

[1961] AC 727

Statutes:

Finance Act 1949 28(2)

Jurisdiction:

England and Wales

Cited by:

CitedRe Levick ChD 1963
The proper law ‘regulating’ the disposition of movable property for the purposes of section 28(2) was the law of the testator’s domicile at the time of his death. Plowman J said that the term ‘regulate’ was concerned with the material or essential . .
CitedDellar v Zivy and others ChD 9-Oct-2007
Disappointed beneficiaries said they had been told that the deceased would leave certain shares to them. He did not do so, and they said the will had incorrectly interpreted his instructions. The defendants denied that the English court had . .
CitedAkers and Others v Samba Financial Group SC 1-Feb-2017
Saad Investments was a Cayman Islands company in liquidation. The liquidator brought an action here, but the defendant sought a stay saying that another forum was clearly more appropriate. Shares in Saudi banks were said to be held in trust for the . .
Lists of cited by and citing cases may be incomplete.

Wills and Probate, Inheritance Tax

Updated: 17 July 2022; Ref: scu.259864

Re Levick: ChD 1963

The proper law ‘regulating’ the disposition of movable property for the purposes of section 28(2) was the law of the testator’s domicile at the time of his death. Plowman J said that the term ‘regulate’ was concerned with the material or essential validity of a will, rather than with its interpretation: ‘In the case of immovables it is lex situs (as the House of Lords held) and in the case of movables it is, in my judgment, the lex domicilii, from which the validity of the disposition stems. As Mr Foster conceded, if the law of South Africa had forbidden the disposition with which I am concerned, it could not have taken effect.’

Judges:

Plowman J

Citations:

[1963] 1 WLR 31

Statutes:

Finance Act 1949 28(2)

Jurisdiction:

England and Wales

Citing:

CitedRe Philipson-Stow HL 1961
The section excluded from liability for estate duty property ‘passing on the death which is situate out of Great Britain if it is shown that the proper law regulating the devolution of the property situate, or the disposition under or by reason of . .

Cited by:

CitedDellar v Zivy and others ChD 9-Oct-2007
Disappointed beneficiaries said they had been told that the deceased would leave certain shares to them. He did not do so, and they said the will had incorrectly interpreted his instructions. The defendants denied that the English court had . .
Lists of cited by and citing cases may be incomplete.

Wills and Probate, Inheritance Tax

Updated: 15 July 2022; Ref: scu.259865

McCall and others v Revenue and Customs: SCIT 7 Apr 2008

SCIT Inheritance tax – Exempt transfers and relief – Business Property – Relevant Business Property – Fields let out under ‘conacre’ or agistment arrangements to graziers – Whether a business – Work carried out by son-in-law while owner’s mental capacity failed – Whether business belonged to the landowner – Whether business excluded from relief as consisting wholly or mainly of making or holding investments – Section 105(3) IHTA 1984.

Citations:

[2008] UKSPC SPC00678

Links:

Bailii

Inheritance Tax

Updated: 14 July 2022; Ref: scu.267763

Glowacki (Deceased) v Revenue and Customs: SCIT 21 Aug 2007

SCIT INHERITANCE TAX – Deed of Variation – variation purporting to take effect as a gift by the deceased before death – whether within s 142 IHTA 1984 and an exempt transfer under s 17 – no – Revenue determination that nil rate band to be set against value of ‘gifted’ property based on variation taking effect – variation of no effect because conditional on intended tax effect – determination accordingly quashed.

Citations:

[2007] UKSPC SPC00631

Links:

Bailii

Statutes:

Inheritance Tax Act 1984 142

Inheritance Tax

Updated: 12 July 2022; Ref: scu.262389

Lloyds TSB Bank Plc (Antrobus Deceased) v Inland Revenue (No 1): SCIT 17 Oct 2002

SCIT INHERITANCE TAX – agricultural property relief – freehold house which was owned and occupied by the deceased – agreed that it was a farmhouse – whether it was of a character appropriate to the property – yes – IHTA 1984 s 115(2).
Miss Antrobus had lived in a substantial freehold house, surrounded by about 126 acres of freehold land and 6.54 acres of tenanted land all of which was agricultural land or pasture. The Inland Revenue agreed the house was a farmhouse, but questioned whether the farmhouse was ‘of a character appropriate to the property’ within the meaning of section 115(2), ‘the property’ being the 126 acres of freehold land and the 6.54 acres of tenanted land which constituted the agricultural land or pasture. The taxpayer argued that the test as to whether a farmhouse was ‘of a character appropriate to the property’ was whether it properly belonged to the surrounding farm.
Held: The dwellinghouse was appropriate, by reference to its size, content and layout, with the farm buildings and the particular area of farmland being farmed: ‘the principles which have been established for deciding whether a farmhouse is of a character appropriate to the property may be summarised as: first, one should consider whether the house is appropriate by reference to its size, content and layout, with the farm buildings and the particular area of farmland being farmed (Korner); secondly, one should consider whether the house is proportionate in size and nature to the requirements of the farming activities conducted on the agricultural land or pasture in question (Starke); thirdly that although one cannot describe a farmhouse which satisfies the ‘character appropriate’ test one knows one when one sees it (Dixon); fourthly, one should ask whether the educated rural layman would regard the property as a house with land or a farm (Dixon); and, finally, one should consider the historical dimension and ask how long the house in question has been associated with the agricultural property and whether there was a history of agricultural production (Dixon). ‘

Judges:

Dr Nuala Brice

Citations:

[2002] UKSC SPC00336

Links:

Bailii

Statutes:

Inheritance Tax Act 1984 8115(2)

Citing:

CitedDixon v Inland Revenue Commissioners SCIT 22-Oct-2001
SCIT INHERITANCE TAX – relief for agricultural property – cottage with garden and orchard extending to 0.6 acres – whether activities were agriculture – whether orchard and garden were agricultural land or . .
CitedStarke and Another (Executors of Brown Deceased) v Inland Revenue Commissioners ChD 24-Feb-1994
Mr Brown, the deceased, had owned a site on which was built a substantial farmhouse, with six bedrooms, and various outbuildings. The site formed part of a farm and the issue was whether the site was ‘agricultural land or pasture’ within the meaning . .
CitedInland Revenue Commissioners v Korner HL 19-Feb-1969
Income tax, Schedule D – D eduction – Farm ing – Maintenance, etc., expenditure on farm house – Whether expenditure for domestic purposes distinct from those of the trade – Income Tax A c t 1952 (15 and 16 Geo. 6 and 1 Eliz. 2, c. 10) 55. 124, . .

Cited by:

See AlsoLloyds TSB Private Banking Plc (personal representative of Rosemary Antrobus deceased) v Inland Revenue (Capital Taxes); Re Cookhill Priory (No 2) LT 10-Oct-2005
LT TAX – Inheritance Tax – agricultural property relief – agricultural value – agricultural property – farmhouses – whether house occupied by ‘lifestyle’ farmer could be farmhouse – held bid of such person could . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 06 July 2022; Ref: scu.242349

HM Revenue and Customs v Trustees of the Nelson Dance Family Settlement: ChD 22 Jan 2009

Appeal by HMRC from a decision giving judgment for the Trustees on a preliminary issue in relation to the liability of the Trustees to pay tax under the 1984 Act 1984 in respect of a transfer by Mr Dance of agricultural land into the hands of the Trustees in late 2002 or early 2003. The preliminary issue concerned the question whether the transfer qualified for business property relief under s. 104 of the IHTA.

Judges:

Sales J

Citations:

[2009] EWHC 71 (Ch), [2009] STI 260, [2009] NPC 11, [2009] BTC 8003, [2009] STC 802

Links:

Bailii

Statutes:

Inheritance Tax Act 1984 104

Jurisdiction:

England and Wales

Inheritance Tax

Updated: 04 July 2022; Ref: scu.280148

Gartside v Inland Revenue Commissioners: HL 13 Dec 1967

Before his death, the deceased had advanced sums to his sons. The House was asked whether they were liable to Estate Duty.
Held: Lord Reid said: ‘no object of a discretionary trust has, as such, any legal right to or in the capital’, although he may possess limited equitable rights against the trustee; ‘mere expectancy or hope of consideration by the trustee” and ”In possession’ must mean that the interest enables you to claim now whatever may be the subject of the interest. For instance, if it is the current income from a certain fund your claim may yield nothing if there is no income, but your claim is a valid claim, and if there is any income you are entitled to get it. But a right to require trustees to consider whether they will pay you something does not enable you to claim anything. If the trustees do decide to pay you something, you do not get it by reason of having the right to have your case considered: you get it only because the trustees have decided to give it to you.’
Lord Wilberforce said that the circumstances in which a beneficiary under a discretionary trust may seek protection, and the nature of the protection he may expect to obtain, will depend on the court’s discretion.

Judges:

Lord Reid, Lord Wilberforce, Viscount Dilhorne

Citations:

[1967] UKHL 6, [1968] AC 553, [1968] 1 All ER 121, [1967] TR 309, [1968] 2 WLR 277

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

CitedRegina v Stannard CACD 1-Nov-2005
The defendant had been convicted of offences in which he had operated to purchase companies and use false debentures to evade corporation tax. Compensation had been sought under the 1988 Act. It was argued that the confiscation order should be . .
Lists of cited by and citing cases may be incomplete.

Trusts, Inheritance Tax

Updated: 04 July 2022; Ref: scu.234398

Lloyds TSB Private Banking Plc (personal representative of Rosemary Antrobus deceased) v Inland Revenue (Capital Taxes); Re Cookhill Priory (No 2): LT 10 Oct 2005

LT TAX – Inheritance Tax – agricultural property relief – agricultural value – agricultural property – farmhouses – whether house occupied by ‘lifestyle’ farmer could be farmhouse – held bid of such person could not represent agricultural value – Inheritance Tax Act 1984 s 115(2) and (3)
George Bartlett QC : ‘a farmhouse for the purposes of section 115(2) is the house of the person who lives in it in order to farm the land comprised in the farm and who farms the land on a day to day basis. The agricultural value of the house in the present case therefore falls to be determined on the assumption that the perpetual covenant to be implied by virtue of section 115(3) would have prevented its use other than in this way. This would have excluded, therefore, the lifestyle purchaser whose principal reason for living in the house was the amenity afforded by it and by the land.’

Judges:

George Bartlett QC The President and Mr N J Rose FRICS

Citations:

[2005] EWLands DET – 47 – 2004

Links:

Bailii

Citing:

CitedInland Revenue Commissioners v Korner HL 19-Feb-1969
Income tax, Schedule D – D eduction – Farm ing – Maintenance, etc., expenditure on farm house – Whether expenditure for domestic purposes distinct from those of the trade – Income Tax A c t 1952 (15 and 16 Geo. 6 and 1 Eliz. 2, c. 10) 55. 124, . .
CitedLindsay v Commissioners of Inland Revenue 1953
The court was asked whether a building was a farmhouse for the purpose of deciding whether reliefs were available for capital expenditure. . .
See AlsoLloyds TSB Bank Plc (Antrobus Deceased) v Inland Revenue (No 1) SCIT 17-Oct-2002
SCIT INHERITANCE TAX – agricultural property relief – freehold house which was owned and occupied by the deceased – agreed that it was a farmhouse – whether it was of a character appropriate to the property – yes . .
CitedCommissioners of Inland Revenue v John M Whiteford and Son 1962
The farm was farmed by a father and son in partnership. They had both lived in the original farmhouse, but a new house was built to house the son. The issue was whether the new house was a farmhouse or an agricultural cottage. If it was a cottage . .
CitedDuke of Buccleuch v Inland Revenue Commissioners HL 1967
When a valuation was to be attributed to a property the test must be applied to the property as it actually existed and not to some other property, even if in real life a vendor would have been likely to make some changes or improvements before . .
CitedStarke and Another (Executors of Brown Deceased) v Inland Revenue Commissioners ChD 24-Feb-1994
Mr Brown, the deceased, had owned a site on which was built a substantial farmhouse, with six bedrooms, and various outbuildings. The site formed part of a farm and the issue was whether the site was ‘agricultural land or pasture’ within the meaning . .
CitedProsser v The Commissioners of Inland Revenue SCIT 12-Mar-2003
INHERITANCE TAX – interest on outstanding tax – whether not due on account of Human Rights points – interest due. . .
CitedHigginson (Executors of) v Inland Revenue SCIT 3-Sep-2002
Inheritance Tax Act 1984, s.115(2) – Agricultural relief – ‘Farmhouse’ . .
CitedDixon v Inland Revenue Commissioners SCIT 22-Oct-2001
SCIT INHERITANCE TAX – relief for agricultural property – cottage with garden and orchard extending to 0.6 acres – whether activities were agriculture – whether orchard and garden were agricultural land or . .
CitedInland Revenue Commissioners v Stenhouse’s Trustees 1992
. .
Lists of cited by and citing cases may be incomplete.

Land, Inheritance Tax

Updated: 04 July 2022; Ref: scu.231288

Perry v Inland Revenue: SCIT 5 Apr 2005

SCIT INHERITANCE TAX – insolvent estate – whether Appellant liable for inheritance tax as a person in whom the property was vested in respect of a joint account held by the Appellant and the deceased – yes – appeal dismissed – IHTA 1984 Ss1-5 and 200(1)(c)
CAPITAL TRANSFER TAX – insolvent estate – whether Appellant liable for capital transfer tax as transferee in respect of a disposition made by the deceased before his death being the grant to the Appellant of a licence to occupy property rent free – yes – appeal dismissed – FA 1975 Ss 19, 20, 23 and 25

Citations:

[2005] UKSPC SPC00474

Links:

Bailii

Inheritance Tax

Updated: 01 July 2022; Ref: scu.228322

Seymour and others v Inland Revenue: SCIT 11 Nov 2004

SCIT Business property relief for inheritance tax purposes – Whether the whole or Ragley Hall qualified notwithstanding part of the interior in private occupation – Section 110 – Meaning of asset – Building wholly or mainly used for business – No provision for apportionment – Exterior wholly used for business – Single asset – Appeal allowed

Citations:

[2004] UKSC SPC00444

Links:

Bailii

Statutes:

Inheritance Tax 1984 110

Inheritance Tax

Updated: 28 June 2022; Ref: scu.221415

Countess Fitzwilliam v Inland Revenue Commissioners: HL 1 Jul 1993

HL Tax avoidance – Capital transfer tax – Whether composite transaction within the Ramsay principle – Whether series of transactions preordained – Whether reverter to settlor exemption applies – Settlor becoming absolutely entitled to property comprised in settlement – Whether property comprised in settlement originated from testator’s estate – Whether testator a settlor of settlement – Whether property reverted to all settlors of the property – Finance Act 1975, ss 19, 20, 24, 47(1 A), and Sch 5, paras 1, 4 and 5, Finance Act 1976, ss 86 and 87, Finance Act 1978, s 69(7).

Citations:

[1993] UKHL TC – 67 – 614, [1993] STI 1038, 67 TC 614, [1993] STC 502, [1993] 1 WLR 1189, [1993] 3 All ER 184

Links:

Bailii

Jurisdiction:

England and Wales

Inheritance Tax

Updated: 27 June 2022; Ref: scu.559864

Hood v HM Revenue and Customs: CA 30 Oct 2018

The court was asked: ‘ whether a reversionary long sub-lease of a valuable London residential property, granted on favourable terms by the taxpayer to her three sons in 1997, was ‘property subject to a reservation’ within the meaning of section 102 of the Finance Act 1986 (‘FA 1986’) when she died in 2008, as it happens some four years before the sub-lease would have fallen into possession. If the sub-lease was property subject to a reservation in the taxpayer’s estate, it formed part of her estate chargeable to inheritance tax (‘IHT’) on her death. If, on the other hand, the sub-lease was not property subject to a reservation in her estate, it escaped any charge to IHT on her death, because (a) it was not deemed by section 102 to remain part of her estate immediately before her death, and (b) the original grant of the sub-lease was a potentially exempt transfer (‘PET’) which she had survived by more than seven years, and which consequently became an exempt transfer.’

Citations:

[2018] EWCA Civ 2405

Links:

Bailii

Jurisdiction:

England and Wales

Inheritance Tax

Updated: 27 June 2022; Ref: scu.628683

Peter John St. Barbe Green, David Robert Mitson (Trustees of the Will of Consuelo Dowager Duchess of Manchester v the Commissioners of Inland Revenue: ChD 11 Jan 2005

The taxpayer appealed a notice of determination of liability of the estate for Inheritance Tax purposes. He sought to set off an excess of liabilities over assets in the deceased’s own estate against assets held in settlements.
Held: The appeal failed. ‘Inheritance tax is charged on death by virtue of the deemed transfer of value in section 4. That is a transfer of value ‘equal to the value of [the deceased’s] estate immediately before his death’. His estate is the ‘aggregate of all property to which he is beneficially interested’. The word ‘property’ is important here. It is not defined for these purposes (section 272 of the Act contains a partial definition in it that states what the expression includes but not what it means), but it is important to note that section 49(1) (which brings in the settled assets) does so by deeming the deceased to be beneficially entitled to ‘the property’ in which his life interest subsists. It does not say ‘net property’ (ie the value of the property net of trust liabilities) but that is what it must mean’

Judges:

The Honourable Mr Justice Mann

Citations:

[2005] EWHC 14 (Ch), Times 14-Jan-2005

Statutes:

Inheritance Tax Act 1984 224 593) 222

Jurisdiction:

England and Wales

Citing:

CitedCommissioners of Inland Revenue v McGuckian HL 21-May-1997
Steps which had been inserted into a commercial transaction, but which had no purpose other than the saving of tax are to be disregarded when assessing the tax effect of the scheme. The modern approach to statutory construction is to have regard to . .
CitedCape Brandy Syndicate v Inland Revenue Commissioners CA 1921
Rowlatt J said: ‘In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied’ and . .
AppliedRe Barnes 1939
A gift was made within three years of death. Under estate duty law it fell to be treated as property passing on the death. The deceased’s estate was heavily insolvent with a deficit of over andpound;90,000 and the executrix claimed that the . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 27 June 2022; Ref: scu.221485

Lynall v Inland Revenue Commissioners: HL 27 Oct 1971

HL Estate duty – Share valuation – Unquoted shares – What information to be deemed available to hypothetical purchaser in open market – Finance Act 1894 (57 6 58 Viet., c.30), 5.7(5).

Citations:

[1971] UKHL TC – 47 – 375, 47 TC 375, [1971] 3 All ER 914, [1972] AC 680, [1971] 3 WLR 759, [1971] TR 309

Links:

Bailii

Statutes:

Finance Act 1894

Jurisdiction:

England and Wales

Inheritance Tax

Updated: 17 June 2022; Ref: scu.559819

Inland Revenue Commissioners v Mallender and Others: ChD 30 Mar 2001

The taxpayer was a member of Lloyds. He had to obtain a guarantee of his liabilities from his bank, who in turn took a charge over a freehold reversion which he owned. It was claimed that having been given in charge for business purposes, the taxpayer could take advantage of business property relief for Inheritance tax purposes. This was not correct. The use of the asset to support a guarantee did not of itself make the asset one used for business purposes.

Citations:

Times 30-Mar-2001

Statutes:

Inheritance Tax Act 1984 105(1) (a)

Jurisdiction:

England and Wales

Inheritance Tax

Updated: 17 June 2022; Ref: scu.82351

In Re Ratcliffe, Deceased: ChD 19 Mar 1999

When apportioning a residuary estate between charitable and non-charitable beneficiaries, the debts should be paid first, the estate divided, and only then the Inheritance Tax calculated. The gross division system used in this case had prejudiced the non-charitable beneficiaries.

Citations:

Times 19-Mar-1999, Gazette 17-Mar-1999, Gazette 31-Mar-1999

Jurisdiction:

England and Wales

Citing:

Not followedIn re Bentham’s Will Trusts 1995
. .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax, Wills and Probate

Updated: 17 June 2022; Ref: scu.82145

Ingram and Another v Inland Revenue Commissioners: ChD 23 May 1995

Lady Ingram had first conveyed properties to her solicitor who on the next day let the properties back to her, and on the day after conveyed the freehold of the properties to her family.
Held: The leases in favour of Lady Ingram, having been granted by a nominee to his principal, were a nullity. However, this did not mean that the leasehold interest which Lady Ingram admittedly acquired against the trustees was a benefit reserved. There had been no point of time at which the trustees and beneficiaries had held the property otherwise than subject to the leasehold interests. Lady Ingram never intended to give them the property free from those interests and they were not therefore included in the gift. The freehold interests in the property were subject to an equitable interest in Lady Ingram equivalent to that which she would have taken had the leases been valid, enjoyed to the entire exclusion of Lady Ingram and of any benefit to her by contract or otherwise. S102 had no application. ‘It appears to me that, whether Lady Ingram took her leasehold interests in equity or by the operation of section 65 of the Law of Property Act, what the trustees and the beneficiaries under the declarations of trust have finished up with is the property subject to those leasehold interests. Unless it can be said that there was a period or point of time at which the trustees and beneficiaries had a more extensive interest out of which the leasehold interests were carved, the subject matter of the gift made by Lady Ingram was the property shorn of those leasehold interests. In deciding whether or not this could be said two things appear to me to be of cardinal importance. First Lady Ingram never intended to give the property to the trustees and beneficiaries free from the leasehold interests which it is common ground that she had. Secondly the creation and existence of these leasehold interests was not in any way dependent upon the concurrence of the trustees and beneficiaries, still less upon the performance by them of some positive act. In terms of substance, Lady Ingram had her leasehold interests from the very same moment that the trustees and beneficiaries had the property subject to those interests.’

Judges:

Ferris J

Citations:

Times 23-May-1995, Gazette 14-Jun-1995, Ind Summary 05-Jun-1995, [1995] 4 All ER 334

Statutes:

Finance Act 1986 102, Inheritance Tax Act 1984 102(2)

Jurisdiction:

England and Wales

Citing:

CitedKildrummy (Jersey) Ltd v Inland Revenue Commissioners IHCS 1990
It was not possible in Scottish law for a man to grant a lease to a nominee for himself: (Lord Hope) ‘I have, as I have said, no difficulty in the concept by which the title to property and the beneficial interest are separated, the title being held . .
CitedRye v Rye HL 1962
Two brothers were in partneship in unequal shares, but acquired a property for use by the business which they held in equal shares. They agreed a parol yearly tenancy between themselves as owners and as partners. After one died his son took over his . .
CitedSt Aubyn v Attorney General HL 12-Jul-1951
The donor exercised powers of appointment ‘to make some part of the settled property his own’, and it was ‘wholly irrelevant that by a contemporaneous or later transaction he surrenders his life interest in other parts of it’. The different parts of . .

Cited by:

Appeal fromIngram and Palmer-Tomkinson (Executors of the Estate of Lady Jane Lindsay Morgan Ingram Deceased) v Commissioners of Inland Revenue CA 28-Jul-1997
The deceased had first conveyed property to her solicitor. Leases back were then created in her favour, and then the freeholds were conveyed at her direction to her children and grandchildren. They were potentially exempt transfers.
Held: . .
At First InstanceIngram and Another v Commissioners of Inland Revenue HL 10-Dec-1998
To protect her estate from Inheritance Tax, the deceased gave land to her solicitor, but then took back a lease. The solicitor then conveyed the land on freehold on to members of her family.
Held: The lease-back by the nominee was not void as . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 17 June 2022; Ref: scu.82331

Inland Revenue v Macalister: HL 10 Apr 1924

The Finance (1909-10) Act 1910, section 58, enacts-‘(1) Any legacy or succession duty which under the . . Succession Duty Act 1853 or any other Act . . is payable at the rate of 5 per cent. or 6 per cent. shall be payable at the rate of 10 per cent. on the amount or value of the legacy or succession. . . (4) This section shall take effect in the case of legacy duty only where the testator by whose will the legacy is given . . dies on or after the 30th day of April 1909 . . and, in the case of a succession arising under a disposition, only if the first succession under the disposition arises on or after that date.’
A testator who was beneficially entitled to certain heritable property in fee, subject to the liferent interest of his mother, died in 1900, leaving a testamentary disposition by which he disponed his estate to his mother in liferent and to a cousin in fee. The liferentrix died in 1910, and thereupon the cousin became entitled to the property, and succession duty became payable upon it.
Held (aff. the judgment of the First Division) that for the purposes of section 58 (4) of the Act of 1910 the succession to the property arose on the testator’s death in 1900, and that accordingly the rate of succession duty payable by his cousin was only 5 per cent.

Judges:

Viscount Cave, Viscount Finlay, Lord Dunedin, Lord Shaw, and Lord Sumner

Citations:

[1924] UKHL 482, 61 SLR 482

Links:

Bailii

Jurisdiction:

Scotland

Inheritance Tax

Updated: 14 June 2022; Ref: scu.631556

Kersner v Revenue and Customs: FTTTx 3 Apr 2019

Inheritance Tax : Domicile – – Costs – Application to opt-into the complex track regime out of time – Application allowed – Disclosure – Application by Appellant for HMRC to disclose certain documents underlying its determination – Application dismissed

Citations:

[2019] UKFTT 221 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Inheritance Tax

Updated: 14 June 2022; Ref: scu.635783

Kempe and others v Inland Revenue: SCIT 22 Jul 2004

SCIT INHERITANCE TAX – deceased employed in United States – deceased’s employer paid premiums under a group term life insurance scheme under which the life of the deceased was insured for $380,000 – deceased could designate one or more beneficiaries to receive this sum on his death – deceased could change the designated beneficiaries – if no valid designation were in force at the date of death the sum assured was payable to the deceased’s estate –whether the deceased had a general power which enabled him to dispose of the sum assured – yes – appeal dismissed – Inheritance Tax Act 1984 S5(2)

Citations:

[2004] UKSC SPC00424

Links:

Bailii

Inheritance Tax

Updated: 11 June 2022; Ref: scu.200059

Higginson (Executors of) v Inland Revenue: SCIT 3 Sep 2002

Inheritance Tax Act 1984, s.115(2) – Agricultural relief – ‘Farmhouse’

Citations:

[2002] UKSC SPC00337, [2002] STC (SCD) 483

Links:

Bailii

Statutes:

Inheritance Tax Act 1984 115(2)

Cited by:

CitedLloyds TSB Private Banking Plc (personal representative of Rosemary Antrobus deceased) v Inland Revenue (Capital Taxes); Re Cookhill Priory (No 2) LT 10-Oct-2005
LT TAX – Inheritance Tax – agricultural property relief – agricultural value – agricultural property – farmhouses – whether house occupied by ‘lifestyle’ farmer could be farmhouse – held bid of such person could . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 10 June 2022; Ref: scu.195407

Faulkner v Inland Revenue: SCIT 30 May 2001

INHERITANCE TAX – settled property – interest in possession – testator’s will gave directions to trustees permitting two married persons to live in house so long as they so wished – after the testator’s death both moved into the house until the death of the survivor – whether the survivor beneficially entitled to an interest in possession – yes – whether, if so entitled, the interest in possession subsisted in the whole of the property – yes – or whether it was shared with the three residuary beneficiaries – no – appeal dismissed – IHTA 1984 ss 49(1) and 50(5)

Judges:

Dr A N Brice

Citations:

[2001] UKSC SPC00278

Links:

Bailii

Statutes:

Inheritance Tax Act 1984 49(1) 50(5)

Inheritance Tax

Updated: 10 June 2022; Ref: scu.195371

Grimwood-Taylor and Another v Inland Revenue: SCIT 23 Nov 1999

SCIT INHERITANCE TAX -Exempt transfers and relief – Business property – Relevant business property – Shares held by Deceased in two companies – Whether the business carried on by the companies was excluded from business property relief as consisting wholly or mainly of one or more of dealing in securities, stocks or shares, land or buildings or making or holding investments – Whether the relevant companies were, with one or more other companies members of a group – Whether the business of the company or either of them was carried on otherwise than for gain – Inheritance Tax Act 1984 Sections 103, 104, 105, 111 and 112.

Citations:

[1999] UKSC SPC00223

Links:

Bailii

Inheritance Tax

Updated: 10 June 2022; Ref: scu.195347

The heirs of H Barbier v Inspecteur van de Belastingdienst Particulieren/Ondernemingen buitenland te Heerlen: ECJ 11 Dec 2003

ECJ Judgment – Interpretation of Articles 48 and 52 of the EEC Treaty (subsequently Articles 48 and 52 of the EC Treaty, now, after amendment, Articles 39 EC and 43 EC), Article 67 of the EEC Treaty (subsequently Article 67 of the EC Treaty, repealed by the Treaty of Amsterdam), Articles 6 and 8a of the EC Treaty (now, after amendment, Articles 12 EC and 18 EC) – Directives 88/361/EEC and 90/364/EEC – Inheritance tax – Requirement of cross-border economic activity – Prohibition of discrimination on the basis of Member State of residence.

Citations:

C-364/01, [2003] EUECJ C-364/01

Links:

Bailii

Jurisdiction:

European

Inheritance Tax

Updated: 08 June 2022; Ref: scu.189880

George and Loochin ( Executors of Stedman, Deceased) v The Commissioners of Inland Revenue: CA 5 Dec 2003

The taxpayers appealed against a decision allowing an appeal by the respondents, that shares in a company which owned land from which it ran a residential caravan park, were shares in a business consisting wholly or mainly of making investments, and that accordingly the transfer did not attract exemption.
Held: The finding of the Commissioners was in essence a finding of fact and unappealable. The divisional court should not have reversed the finding, and the the commissioners’ decision was re-instated. The business incoprorated both service and investment elements.

Judges:

Lady Justice Hale Lord Justice Carnwath

Citations:

[2004] WTLR 75, [2004] STC 147, [2003] STI 2276, [2004] BTC 8003, [2003] EWCA Civ 1763, Times 09-Dec-2003, Gazette 22-Jan-2004

Links:

Bailii

Statutes:

Inheritance Tax Act 1984 105(3)

Jurisdiction:

England and Wales

Citing:

Appeal fromInland Revenue Commissioners v George and another ChD 27-Feb-2003
The company ran a residential homes park. The users owned the caravans, but the taxpayer owned the land. They claimed exemption on a transfer of shares under section 104(1).
Held: The company was an investment company with section 105, and so . .

Cited by:

Appealed toInland Revenue Commissioners v George and another ChD 27-Feb-2003
The company ran a residential homes park. The users owned the caravans, but the taxpayer owned the land. They claimed exemption on a transfer of shares under section 104(1).
Held: The company was an investment company with section 105, and so . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 08 June 2022; Ref: scu.188424

Commissioners of Inland Revenue v Eversden Eversden (As Executors of the Will of Greenstock Deceased): CA 15 May 2003

The executors challenged the assessment to Inheritance tax on the estate. The commissioners claimed that a gift of property into a trust included a sufficient reservation of benefit to disallow it as an exempt transfer.
Held: The scheme was effective. The trust provided for the income to be paid to the settlor’s husband during his life, but after his death on discretionary trusts to a class of beneficiaries including the settlor for 80 years. The transfer into the trust was an exempt transfer, and although his interest was limited, it was treated as entitled to the whole under s49. The draughtsman did not equate a disposal by gift with a transfer of value, and the court could not do it for him.

Judges:

Lord Justice Brooke Mr Justice Nelson Lord Justice Carnwath

Citations:

[2003] EWCA Civ 668, Times 30-May-2003, Gazette 10-Jul-2003

Links:

Bailii

Statutes:

Inheritance Tax Act 1984 18 49(1) 102, Finance Act 1986 100

Jurisdiction:

England and Wales

Citing:

AppliedIngram and Another v Commissioners of Inland Revenue HL 10-Dec-1998
To protect her estate from Inheritance Tax, the deceased gave land to her solicitor, but then took back a lease. The solicitor then conveyed the land on freehold on to members of her family.
Held: The lease-back by the nominee was not void as . .
CitedSt Aubyn v Attorney General HL 12-Jul-1951
The donor exercised powers of appointment ‘to make some part of the settled property his own’, and it was ‘wholly irrelevant that by a contemporaneous or later transaction he surrenders his life interest in other parts of it’. The different parts of . .
CitedLang v Webb 1912
(High Court of Australia) In 1908 the deceased had transferred and conveyed a piece of land to each of her three sons; on the same date as, but subsequently to, the execution of the transfers and conveyances there had been executed by the deceased . .
Appeal fromInland Revenue Commissioners v Eversden and Another ChD 10-Jul-2002
A settlor had created a discretionary trust in favour of her husband. The Commissioners sought to apply the reservation of benefit provisions.
Held: The settlor’s retained entitlement as a discretionary beneficiary did constitute a reservation . .
CitedCommissioner for Stamp Duties of New South Wales v Perpetual Trust Company Ltd PC 1943
(Australia) The court considered reservation of benefit rules. Under the settlement the trustees were required to hold certain company shares, to apply the income for the maintenance of the settlor’s son during his minority, and to transfer the . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 07 June 2022; Ref: scu.182222

The Commissioners of Inland Revenue v Rysaffe Trustee Company (CI) Limited: CA 20 Mar 2003

The taxpayers had repeatedly settled shares in the taxpayer company in foreign trusts. The Commissioners sought to use the special legislative regime, imposing a periodic charge to Inheritance Tax on discretionary trusts.
Held: Inheritance Tax should be calculated on the basis that each brother made five separate settlements; s 43 of the 1984 Act does not entitle the CIR to treat five settlements as if they were one settlement.

Judges:

Lord Justice Mummery Lord Justice Dyson Lord Justice Schiemann

Citations:

[2003] EWCA Civ 356, Times 29-Apr-2003, Gazette 05-Jun-2003

Links:

Bailii

Statutes:

Inheritance Tax Act 1984 43

Jurisdiction:

England and Wales

Citing:

Appeal fromThe Commissioners of Inland Revenue v Rysaffe Trustee Company (Ci) Limited ChD 31-May-2002
The taxpayers had placed shares in the defendant company in foreign trusts.
Held: Under the general law, each brother had made five separate settlements; that s 43 did not reduce the five settlements to one settlement; that there were five . .

Cited by:

Appealed toThe Commissioners of Inland Revenue v Rysaffe Trustee Company (Ci) Limited ChD 31-May-2002
The taxpayers had placed shares in the defendant company in foreign trusts.
Held: Under the general law, each brother had made five separate settlements; that s 43 did not reduce the five settlements to one settlement; that there were five . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax, Company

Updated: 07 June 2022; Ref: scu.179911

Melville and Others v Inland Revenue Commissioners: ChD 27 Jun 2000

A settlor created a common form discretionary trust save only that it included a right to require, after 90 days, the trustees to revest the settled fund in the settlor. A chargeable transfer was calculated at the reduction in value of his estate after the transfer. The clause meant that the sums remained ‘rights and interests of any description’ belonging to the settlor. The Revenue had not established that the statutory definition of property should not apply.

Citations:

Times 27-Jun-2000, Gazette 29-Jun-2000

Statutes:

Inheritance Tax Act 1984

Jurisdiction:

England and Wales

Cited by:

Appeal fromMelville and others v Commissioners of Inland Revenue CA 31-Jul-2001
The taxpayer, to minimize his tax, put assets into a discretionary trust. The trust included the right for him to give 90 days notice requiring the assets to be transferred to him absolutely. He successfully argued that the assets were no longer . .
Lists of cited by and citing cases may be incomplete.

Trusts, Inheritance Tax, Capital Gains Tax

Updated: 04 June 2022; Ref: scu.83617

Inland Revenue Commissioners v Lloyds Private Banking Ltd: ChD 10 Apr 1998

Provision in will where one tenant in common directed that surviving tenant be allowed to occupy house until death and thereafter gave the share to his daughter created a sufficient interest for the survivor to be charged to tax.

Citations:

Times 10-Apr-1998, Gazette 13-May-1998

Statutes:

Inhertance Tax Act 1984

Jurisdiction:

England and Wales

Wills and Probate, Inheritance Tax

Updated: 04 June 2022; Ref: scu.82349

Ingram and Another v Commissioners of Inland Revenue: HL 10 Dec 1998

To protect her estate from Inheritance Tax, the deceased gave land to her solicitor, but then took back a lease. The solicitor then conveyed the land on freehold on to members of her family.
Held: The lease-back by the nominee was not void as a grant of a lease to herself.
Lord Hoffmann said: ‘whether the equitable obligation to grant a lease back to Lady Ingram is regarded as imposed on the trustees or on the beneficiaries, this obligation arose as soon as the freehold vested in the trustees. In the present case there never was a time when, in equity, the donees held the property free from the donor’s leasehold interest, and I am in agreement with the observation of Ferris J . . that: ‘In terms of substance, Lady Ingram had her leasehold interests from the very same moment that the trustees and beneficiaries had the property subject to those interests.” and ‘viewing the substance of the transaction, I consider that what was comprised in the gift made by Lady Ingram was the freehold shorn of the leasehold interest, and section 102 does not apply. ‘
In effect the first gift to the solicitor was a gift which did not include the leasehold carved from it, and therefore validity of the the leases was not in issue. The appeal was allowed. Section 102 did not apply.
‘a trustee in English law is not an agent for his beneficiary. He contracts in his own name with a right of indemnity against the beneficiary for the liabilities he has incurred.’

Judges:

Lord Browne-Wilkinson, Lord Steyn, Lord Hoffmann, Lord Clyde, Lord Hutton

Citations:

[1998] UKHL 47, [2001] AC 293, [[1999] 1 All ER 297, [1999] 2 WLR 90, (1999) STC 37

Links:

House of Lords, Bailii

Statutes:

Finance Act 1986 102

Jurisdiction:

England and Wales

Citing:

CitedIn re Nichols, deceased CA 2-Jan-1975
The father, Lord Nichols, gave property to his sons who then leased it back to him. On the father’s death the revenue claimed duty.
Held: Goff LJ: ‘Having thus reviewed the authorities, we return to the question what was given, and we think . .
CitedSt Aubyn v Attorney General HL 12-Jul-1951
The donor exercised powers of appointment ‘to make some part of the settled property his own’, and it was ‘wholly irrelevant that by a contemporaneous or later transaction he surrenders his life interest in other parts of it’. The different parts of . .
CitedIn re Nichols, deceased ChD 1974
The father, Lord Nichols, in 1954, decided to make a gift of his family home and the surrounding estate to his son, aged 22. The father was to transfer the estate and the son would immediately lease the bulk of the property back to the father, the . .
Appeal fromIngram and Palmer-Tomkinson (Executors of the Estate of Lady Jane Lindsay Morgan Ingram Deceased) v Commissioners of Inland Revenue CA 28-Jul-1997
The deceased had first conveyed property to her solicitor. Leases back were then created in her favour, and then the freeholds were conveyed at her direction to her children and grandchildren. They were potentially exempt transfers.
Held: . .
CitedMunro v Commissioner for Stamp Duties PC 1933
In 1909, the deceased orally agreed with his six children that he and they would carry on the business of graziers on land owned by him as partners under a partnership at will. In 1913 the deceased transferred by way of gift the freehold interest in . .
At First InstanceIngram and Another v Inland Revenue Commissioners ChD 23-May-1995
Lady Ingram had first conveyed properties to her solicitor who on the next day let the properties back to her, and on the day after conveyed the freehold of the properties to her family.
Held: The leases in favour of Lady Ingram, having been . .
CitedRye v Rye HL 1962
Two brothers were in partneship in unequal shares, but acquired a property for use by the business which they held in equal shares. They agreed a parol yearly tenancy between themselves as owners and as partners. After one died his son took over his . .
CitedGreyv Ellison 1856
A policy of insurance was created in which one department of an insurance company purported to effect a contract with another department of the same company. Although different individuals were parties to the contract, they all contracted as agents . .
CitedAttorney General v Worrall CA 1895
The donor gave his son the benefit of a debt of about andpound;24,000 which was owing to him, in return for which the son covenanted to pay the father an annuity of andpound;735 p.a. during his life.
Held: ‘It has been held that in cases of . .
CitedLang v Webb 1912
(High Court of Australia) In 1908 the deceased had transferred and conveyed a piece of land to each of her three sons; on the same date as, but subsequently to, the execution of the transfers and conveyances there had been executed by the deceased . .
CitedAbbey National Building Society v Cann HL 29-Mar-1990
Registered land was bought with an advance from the plaintiff. The transfer and charge were registered one month later, but in the meantime, the buyer’s parents moved in. When the buyer defaulted, his mother resisted possession proceedings, saying . .
CitedKildrummy (Jersey) Ltd v Inland Revenue Commissioners IHCS 1990
It was not possible in Scottish law for a man to grant a lease to a nominee for himself: (Lord Hope) ‘I have, as I have said, no difficulty in the concept by which the title to property and the beneficial interest are separated, the title being held . .
CitedIn re Cochrane 1905
(Ireland) ‘as in these questions of revenue, matters of mere conveyancing form are immaterial; as we are to view the substance only of the transaction, and as ‘gift’ in the context means ‘beneficial gift,’ so, too, in the actual case before us, . .
CitedW T Ramsay Ltd v Inland Revenue Commissioners HL 12-Mar-1981
The taxpayers used schemes to create allowable losses, and now appealed assessment to tax. The schemes involved a series of transactions none of which were a sham, but which had the effect of cancelling each other out.
Held: If the true nature . .

Cited by:

AppliedCommissioners of Inland Revenue v Eversden Eversden (As Executors of the Will of Greenstock Deceased) CA 15-May-2003
The executors challenged the assessment to Inheritance tax on the estate. The commissioners claimed that a gift of property into a trust included a sufficient reservation of benefit to disallow it as an exempt transfer.
Held: The scheme was . .
CitedInland Revenue Commissioners v Eversden and Another ChD 10-Jul-2002
A settlor had created a discretionary trust in favour of her husband. The Commissioners sought to apply the reservation of benefit provisions.
Held: The settlor’s retained entitlement as a discretionary beneficiary did constitute a reservation . .
CitedHSBC Bank Plc v Dyche and Another ChD 18-Nov-2009
The parties disputed the claimed beneficial interest of the second defendant. The second defendant (C) said that it had been purchased for him by the first defendant (D) from C’s trustee in bankruptcy, and was thereafter held in trust for him on the . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax, Landlord and Tenant

Updated: 31 May 2022; Ref: scu.158978

Melville and others v Commissioners of Inland Revenue: CA 31 Jul 2001

The taxpayer, to minimize his tax, put assets into a discretionary trust. The trust included the right for him to give 90 days notice requiring the assets to be transferred to him absolutely. He successfully argued that the assets were no longer part of his estate, since that right was an asset in his estate. The revenue appealed. The sections defined his estate as ‘the aggregate of all property to which he is beneficially entitled’, and section 272 included rights and interests of any description. The right was valuable, and thus substantially reduced the value transferred into the trust fund, and therefore the tax payable on that transfer.

Judges:

Lord Justice Peter Gibson, Lady Justice Arden, Lord Justice Kay

Citations:

Gazette 27-Sep-2001, Times 09-Oct-2001, [2001] EWCA Civ 1247, (2001-02) 4 ITELR 231, [2001] STC 1271, [2001] NPC 132, 74 TC 372, [2001] STI 1106, [2001] WTLR 887, [2002] 1 WLR 407, [2001] BTC 8039

Links:

Bailii

Statutes:

Inheritance Tax Act 1984 3(1) 5 272

Jurisdiction:

England and Wales

Citing:

Appeal fromMelville and Others v Inland Revenue Commissioners ChD 27-Jun-2000
A settlor created a common form discretionary trust save only that it included a right to require, after 90 days, the trustees to revest the settled fund in the settlor. A chargeable transfer was calculated at the reduction in value of his estate . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax, Capital Gains Tax, Trusts

Updated: 31 May 2022; Ref: scu.147653

Lethbridge v Attorney General: HL 3 Dec 1906

A father, equitable tenant for life of an estate, had raised sums amounting to pounds 59,121 on the security of his life estate and of certain policies of insurance on his life. By agreement with his son, equitable tenant in tail in remainder, the estate was disentailed and pounds 71,000 raised on mortgage of the fee, out of which the mortgages for pounds 59,121 were paid off. Under the same agreement the policies, having been reassigned to the tenant for life, were assigned by him to his son, and the estate was re-settled upon trust, inter alia, out of the rents and profits to pay the interest on the mortgage debt of pounds 71,000 and the premiums necessary for the policies, but in the event of any of the policies being surrendered by the son, then to pay the amount that would otherwise have been payable as a premium to the son, and to apply the residue of the rents and profits in paying to the son the sum of pounds 1000 a-year, and, subject to the trusts already mentioned, in trust for the tenant for life with remainder on his death to his son in fee. Subsequently, in consideration of the sum of pounds 4100, the tenant for life assigned his life estate to the son, subject, however, to the trust for keeping on foot the policies, and the amount of the price paid to the tenant for life was calculated on the footing that the life estate was subject to that trust. The policies were kept up under the before-mentioned trust, and on the death of the tenant for life the son received the sums due under the policies.
Held ( reversing the judgment of the Court of Appeal) that, as the son had given full value for the policies, they were not ‘provided’ by the father within the meaning of section 2 (1) ( d) of the Finance Act 1894, and that consequently no estate duty was payable on the father’s death in respect of the moneys received under them.

Judges:

Lord Chancellor (Loreburn), Lords Macnaghten, James of Hereford, Robertson, and Atkinson

Citations:

[1906] UKHL 986

Links:

Bailii

Jurisdiction:

England and Wales

Inheritance Tax

Updated: 29 May 2022; Ref: scu.625472

Cox, Executors of The Late v Revenue and Customs: FTTTx 3 Nov 2020

INHERITANCE TAX – Business Property Relief – s 104 and s 105 of Inheritance Tax Act 1984 – furnished holiday letting business – whether relevant business property – whether business wholly or mainly of making or holding investments – appeal dismissed

Citations:

[2020] UKFTT 442 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Inheritance Tax

Updated: 23 May 2022; Ref: scu.656842

Palliser v Revenue and Customs Re Wedderburn Road: UTLC 16 Mar 2018

Inheritance Tax – valuation under s160 Inheritance Tax Act 1984 – maisonette – whether hope value for extension to be taken into account – analysis of comparables – value of appellant’s undivided share determined at pounds 1,603,930 – appeal allowed in part

Citations:

[2018] UKUT 71 (LC)

Links:

Bailii

Statutes:

Inheritance Tax Act 1984 160

Jurisdiction:

England and Wales

Land, Inheritance Tax

Updated: 23 May 2022; Ref: scu.606889

Akanwo v Revenue and Customs, Re: 180 Morley Avenue: UTLC 10 Apr 2018

Tax – Inheritance Tax – valuation under s.160 Inheritance Tax Act 1984 – terraced house – analysis of comparable sales – valuation determined at pounds 260,000

Citations:

[2018] UKUT 113 (LC)

Links:

Bailii, Bailii

Statutes:

Inheritance Tax Act 1984 160

Jurisdiction:

England and Wales

Inheritance Tax

Updated: 20 May 2022; Ref: scu.608669

Starke and Another (Executors of Brown Deceased) v Inland Revenue Commissioners: ChD 24 Feb 1994

Mr Brown, the deceased, had owned a site on which was built a substantial farmhouse, with six bedrooms, and various outbuildings. The site formed part of a farm and the issue was whether the site was ‘agricultural land or pasture’ within the meaning of section 115(2).
Held: A site with farm buildings only is not within the definition of agricultural land in the section. Such buildings had to be proportionate in size and nature to the requirements of the farming activities: ‘If cottages, farm buildings and farmhouses which are occupied and used for the purposes of agriculture fall within the meaning of agricultural land it is difficult to see what the point is of the ‘character appropriate’ requirement in limb (3). If, however, cottages, farm buildings and farmhouses, together with any land occupied with them, are not within the expression ‘agricultural land or pasture’ but will constitute ‘agricultural property’ if used in connection with agricultural land or pasture provided that they are of a character appropriate to such agricultural land or pasture (that is, are proportionate in size and nature to the requirements of the farming activities conducted on the agricultural land or pasture in question) then it is possible to attribute a full meaning to that limb.’
‘Agricultural property’ for Inheritance tax purposes was restricted to pasture land which remained undeveloped.

Judges:

Blackburne J

Citations:

Gazette 30-Mar-1994, Times 24-Feb-1994, [1994] STC 295

Statutes:

Inheritance Tax Act 1984 115

Jurisdiction:

England and Wales

Cited by:

Appeal fromStarke and another (Executors of Brown decd) v Inland Revenue Commissioners CA 23-May-1995
The deceased had owned a site of 2.5 acres on which were built a large farmhouse, and other outbuildings.
Held: The court identified the identify the three separate dimensions to the definition of agricultural property under the Act. The . .
CitedLloyds TSB Private Banking Plc (personal representative of Rosemary Antrobus deceased) v Inland Revenue (Capital Taxes); Re Cookhill Priory (No 2) LT 10-Oct-2005
LT TAX – Inheritance Tax – agricultural property relief – agricultural value – agricultural property – farmhouses – whether house occupied by ‘lifestyle’ farmer could be farmhouse – held bid of such person could . .
CitedLloyds TSB Bank Plc (Antrobus Deceased) v Inland Revenue (No 1) SCIT 17-Oct-2002
SCIT INHERITANCE TAX – agricultural property relief – freehold house which was owned and occupied by the deceased – agreed that it was a farmhouse – whether it was of a character appropriate to the property – yes . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 20 May 2022; Ref: scu.89502

In re Nichols, deceased: ChD 1974

The father, Lord Nichols, in 1954, decided to make a gift of his family home and the surrounding estate to his son, aged 22. The father was to transfer the estate and the son would immediately lease the bulk of the property back to the father, the lease to contain a full repairing covenant on the part of the son. The gift of the freehold took effect on 24th June 1955, but the lease did not take effect until 16th July, when it was not in its original form but contained, in addition, a covenant by the son to pay the tithe redemption annuity charged on the property. The father continued to live in the family home and to enjoy the property comprised in the lease, paying less than a rack rent, until his death in 1962. The Crown claimed estate duty on the father’s death in respect of the freehold, primarily on the ground that the lease back had prevented it from being enjoyed to his entire exclusion. The son argued that the father had given him the freehold subject to an equitable obligation to grant a lease back, and that the property disposed of accordingly consisted of the reversion expectant on the determination of the lease.
Held: If the son had been under an equitable obligation to grant the lease back, the property disposed of would have been the reversion. However, there was no such obligation, and the property disposed of was the freehold, which, not having been enjoyed to the entire exclusion of the father, was dutiable accordingly. ‘If I consider the matter in principle, it appears to me that if a donor D conveys property to a trustee T to hold upon trust as to some interest therein for a beneficiary B and as to the remainder of the property for the donor D himself, all that the donor has given to the beneficiary is the property shorn of the rights to be held in trust for D, all that the donor has given to the beneficiary is the property shorn of the rights to be held in trust for D. So that, for example,if in Lang v. Webb (1912) 13 C.L.R. 503 Mrs. Henrietta Lang had conveyed the land to a trustee upon trust to grant thereout a lease back to herself, and subject thereto to hold the various parcels of land upon trust for the sons absolutely, I do not think it could have been seriously argued that in each case the gift made by her was other than a gift of the reversion only. The case would be indistinguishable from Munro v. Commissioner of Stamp Duties (N.S.W.) [1934] A.C. 61, a decision of the Privy Council. Now, suppose that there is no intermediate trustee, but that B takes the property directly but burdened with the equitable obligation to grant the lease back. Does this make any difference? In my opinion, the answer must be in the negative. For in such a case, in very truth, B takes the property as trustee, and the coincidence in identity of B and T cannot make any real difference to the legal analysis.’ and ‘Now, both the speech of Lord Radcliffe [in St. Aubyn v. Attorney General] and the passages I have cited from Dymond’s Death Duties [15th ed., (1973), p. 358] are encrusted with the language of the statute with which I have not so far dealt, but I think it is quite plain from such speech and such comments that there is no legal impediment to regarding simultaneous transactions (e.g. conveyance and reservation of rent charge, conveyance and lease back) as only giving the donee the property as so charged in the one case, or the reversion expectant on the lease in the other case. Equity, of course, looks upon that as done which ought to be done, so that if there is an immediate equitable obligation upon the donee to grant a lease back, this can, in equity, be looked upon as if it had happened at the very moment of the conveyance itself.’

Judges:

Walton J

Citations:

[1974] 1 WLR 296

Statutes:

Finance Act 1894 2(1)(c)

Jurisdiction:

England and Wales

Cited by:

Appeal fromIn re Nichols, deceased CA 2-Jan-1975
The father, Lord Nichols, gave property to his sons who then leased it back to him. On the father’s death the revenue claimed duty.
Held: Goff LJ: ‘Having thus reviewed the authorities, we return to the question what was given, and we think . .
CitedIngram and Another v Commissioners of Inland Revenue HL 10-Dec-1998
To protect her estate from Inheritance Tax, the deceased gave land to her solicitor, but then took back a lease. The solicitor then conveyed the land on freehold on to members of her family.
Held: The lease-back by the nominee was not void as . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 19 May 2022; Ref: scu.182742

Guild v Inland Revenue Commissioners: HL 6 May 1992

The will left land for a sports centre to a local authority which no longer existed. If the gift was charitable, the gift would be applied cy pres, but if not it would fail and pass to the family and be subect to Inheritance Tax.
Held: A gift to a local authority of land on which to construct a sports centre, was in its nature charitable, and the gift is exempt therefore from Inheritance Tax.

Judges:

Lord Keith of Kinkel, Lord Roskill, Lord Griffiths, Lord Jauncey of Tullichettle, Lord Lowry

Citations:

Gazette 06-May-1992, [1990] UKHL 10, [1992] 2 AC 310, [1992] UKHL 16, [1993] Imm AR 112, [1992] 1 WLR 1052, [1992] 4 All ER 673

Links:

Bailii, Bailii

Statutes:

Finance Act 1975 Sch 6 para 10, Income and Corporation Taxes Act 1970 360(3), Recreational Charities Act 1958 1

Citing:

CitedRussell’s Executor v Balden 1989
. .
CitedInland Revenue Commissioners v McMullen ChD 1978
The Football Association set up a trust to promote football and other sports in schools and universities. The parties disputed whether a valid charitable trust had been created.
Held: The trust was not valid as one for the advancement of . .
CitedInland Revenue Commissioners v McMullen HL 6-Mar-1980
HL Charity – Promotion of sport – Trust created ‘to organise or provide or assist in the organisation and provision of facilities which will enable and encourage pupils of schools and universities in any part of . .
CitedBaddeley (Trustees of the Newtown Trust) v Inland Revenue Commissioners HL 17-Feb-1955
Land had been conveyed to trustees for the moral, social and physical well-being of a community. The court considered whether the trust was charitable in nature, where it was said that it confined the benefits to a class of people who do not . .
CitedIncome Tax Special Commissioners v Pemsel HL 20-Jul-1891
Charitable Purposes used with technical meaning
The House was asked whether, in a taxing statute applying to the whole of the United Kingdom and allowing for deductions from and allowances against the income of land vested in trustees for charitable purposes, the words ‘charitable purposes’ . .
CitedInland Revenue Commissioners v McMullen CA 1979
The Football Association had set up a trust to promote football in universities and schools, claiming this was charitable under the 1958 Act.
Held: The trust was not charitable whether as being for the advancement of education, or in the . .
CitedWeir v Crum-Brown HL 6-Feb-1908
If a bequest in a will to a class of persons is capable of application by the trustees, or failing them, the court, the gift is not void for uncertainty. Lord Macnaghten said: ‘The testator has taken pains to provide competent judges. It is for the . .
CitedCommissioner of Valuation for Northern Ireland v Lurgan Borough Council CANI 1968
The respondent local authority owned an indoor swimming pool. It claimed exemption from rates under section 2 of the 1854 Act saying that it was used exclusively for the purposes of a recreational charity under the Act of 1958.
Held: (By a . .
CitedNational Deposit Friendly Society Trustees v Skegness Urban District Council HL 1959
The House considered the meaning of the phrase ‘the advancement of . . social welfare’ in the 1955 Act. Lord Denning said: ‘A person is commonly said to be engaged in ‘social welfare’ when he is engaged in doing good for others who are in need – in . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax, Charity, Scotland

Updated: 19 May 2022; Ref: scu.81079

In re Nichols, deceased: CA 2 Jan 1975

The father, Lord Nichols, gave property to his sons who then leased it back to him. On the father’s death the revenue claimed duty.
Held: Goff LJ: ‘Having thus reviewed the authorities, we return to the question what was given, and we think that a grant of the fee simple, subject to and with the benefit of a lease back, where such a grant is made by a person who owns the whole freehold free from any lease, is a grant of the whole fee simple with something reserved out of it, and not a gift of a partial interest leaving something in the hands of the grantor which he has not given. It is not like a reversion or remainder expectant on a prior interest. It gives an immediate right to the rent, together with a right to distrain for it, and, if there be a proviso for re-entry, a right to forfeit the lease. Of course, where, as in Munro v. Commissioner of Stamp Duties (N.S.W.) [1934] A.C. 61, the lease, or, as it then may have been, a licence coupled with an interest, arises under a prior independent transaction, no question can arise because the donor then gives all that he has, but where it is a condition of the gift that a lease back shall be created, we think that must, on a true analysis, be a reservation of a benefit out of the gift and not something not given at all.’ Having referred to the gift of the freehold and the material estate duty provisions, and then stated the three problems thereby posed: ‘whether all that was given was the beneficial interest in the estate shorn of the benefit of the rights and interests of the donor under the lease back, in which case, prima facie, the gift must fall outside the statutory provision, or whether the gift was of the whole beneficial interest in the property, in which case it is not disputed that the lease back must have prevented the son from assuming bona fide possession and enjoyment immediately upon the gift to the entire exclusion of the father, and also whether the covenants in the lease are such that in any case the son cannot be said to have assumed such possession and enjoyment to the entire exclusion of any benefit to the father by contract or otherwise within the meaning of the section.’ There were two unanswerable reasons why the case was caught by the statutory provision, i.e. the full repairing covenant on the part of the son and his covenant to pay tithe redemption annuity.

Judges:

Russell and Cairns LJJ and Goff J

Citations:

[1975] 1 WLR 534

Statutes:

Finance Act 1894 2(1)(c)

Jurisdiction:

England and Wales

Citing:

Appeal fromIn re Nichols, deceased ChD 1974
The father, Lord Nichols, in 1954, decided to make a gift of his family home and the surrounding estate to his son, aged 22. The father was to transfer the estate and the son would immediately lease the bulk of the property back to the father, the . .
CitedAttorney General v Earl Grey QBD 1898
. .
CitedAttorney General v Earl Grey CA 2-Jan-1898
The court considered the effectiveness of a gift from father to son for estate duty purposes, where the revenue said that the father had reseved an interest in the land to himself. The conveyance to the defendant donee contained the following . .
CitedGrey (Earl) v Attorney General HL 1900
The donor conveyed land to his son by way of gift but reserved an annual rentcharge during his life which was charged on the land conveyed and which his son covenanted to pay (together with the other liabilities of the donor), and retained the right . .
CitedRe Cochrane 1905
(High Court of Ireland) The court considered the effectivenmess of a gift with a reservation to the donor, distinguishing Earl Grey: ‘The limitation of this annuity, although prior to the gift, was, as well as being charged on the land, secured by . .
CitedMunro v Commissioner for Stamp Duties PC 1933
In 1909, the deceased orally agreed with his six children that he and they would carry on the business of graziers on land owned by him as partners under a partnership at will. In 1913 the deceased transferred by way of gift the freehold interest in . .
CitedCommissioner of Stamp Duties of New South Wales v Perpetual Trustee Co Ltd PC 1943
The Board consideerd the application of the retention of benefit rules. Lord Russell of Killowen said: ‘the entire exclusion of the donor from . . enjoyment which is contemplated . . is entire exclusion from . . enjoyment of the beneficial interest . .
CitedOakes v Commissioner of Stamp Duties of New South Wales PC 1953
oakes_csdnswPC1954
A father made a gift of land in favour of himself and his four children in equal shares but then retained wide powers of management for which he reserved the right to charge remuneration.
Held: The donor was entirely excluded from the . .

Cited by:

CitedIngram and Another v Commissioners of Inland Revenue HL 10-Dec-1998
To protect her estate from Inheritance Tax, the deceased gave land to her solicitor, but then took back a lease. The solicitor then conveyed the land on freehold on to members of her family.
Held: The lease-back by the nominee was not void as . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 16 May 2022; Ref: scu.182741

Fetherstonhaugh (formerly Finch) v Inland Revenue Commissioners: CA 1985

Citations:

[1985] 1 Ch 1, [1984] STC 261

Cited by:

CitedKennedy v The Information Commissioner and Another CA 12-May-2011
The claimant, a journalist, sought further information from the Charity Commission after the release of three investigations into the ‘Mariam Appeal’ and questions about the source and use of its funds. The Commission replied that it was exempt . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 15 May 2022; Ref: scu.439868

Attorney General v Earl Grey: QBD 1898

Citations:

[1898] 1 QB 318

Cited by:

MentionedIngram and Palmer-Tomkinson (Executors of the Estate of Lady Jane Lindsay Morgan Ingram Deceased) v Commissioners of Inland Revenue CA 28-Jul-1997
The deceased had first conveyed property to her solicitor. Leases back were then created in her favour, and then the freeholds were conveyed at her direction to her children and grandchildren. They were potentially exempt transfers.
Held: . .
Appeal fromAttorney General v Earl Grey CA 2-Jan-1898
The court considered the effectiveness of a gift from father to son for estate duty purposes, where the revenue said that the father had reseved an interest in the land to himself. The conveyance to the defendant donee contained the following . .
CitedIn re Nichols, deceased CA 2-Jan-1975
The father, Lord Nichols, gave property to his sons who then leased it back to him. On the father’s death the revenue claimed duty.
Held: Goff LJ: ‘Having thus reviewed the authorities, we return to the question what was given, and we think . .
CitedSt Aubyn v Attorney General HL 12-Jul-1951
The donor exercised powers of appointment ‘to make some part of the settled property his own’, and it was ‘wholly irrelevant that by a contemporaneous or later transaction he surrenders his life interest in other parts of it’. The different parts of . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 13 May 2022; Ref: scu.223757

In re Miller’s Agreement, Uniacke v Attorney-General: ChD 1947

Two partners had covenanted with a retiring partner that on his death they would pay certain annuities to his daughters. The Revenue claimed estate duty.
Held: The claim was rejected. The daughters were not parties to the agreement, and had no right to sue for their annuities. Whether they received them or not depended on whether the other partners were willing to pay or if they did not pay whether the deceased partner’s executor was willing to enforce the contract. After citing the earlier cases Wynn-Parry J. said: ‘I think it emerges from these cases that the section has not the effect of creating rights but only of assisting the protection of rights shewn to exist.’

Judges:

Wynn-Parry J

Citations:

[1941] 1 Ch 615

Statutes:

Law of Property Act 1925 56

Citing:

CitedIn re Foster 1938
. .

Cited by:

CriticisedSmith and Snipes Hall Farm Ltd v River Douglas Catchment Board CA 1949
Benefit of Covenant Ran with Land
In 1938, landowners and the Catchment Board agreed that the Board would make good and maintain the banks of a stream, with the landowners contributing to the cost. The agreement was not said to be for the benefit of the landowner’s successors in . .
CitedBeswick v Beswick HL 29-Jun-1967
The deceased had assigned his coal merchant business to the respondent against a promise to pay andpound;5.00 a week to his widow whilst she lived. The respondent appealed an order requiring him to make the payments, saying that as a consolidating . .
Lists of cited by and citing cases may be incomplete.

Contract, Inheritance Tax

Updated: 01 May 2022; Ref: scu.251042

Kildrummy (Jersey) Ltd v Inland Revenue Commissioners: IHCS 1990

It was not possible in Scottish law for a man to grant a lease to a nominee for himself: (Lord Hope) ‘I have, as I have said, no difficulty in the concept by which the title to property and the beneficial interest are separated, the title being held by a nominee. There is no reason to doubt the efficacy of this arrangement where the property in question has some independent existence of its own… But I know of no case, and none was cited to us, where it has been held that a nominee may contract with his principal so as to create new rights and obligations involving no third party whatever which are to be held only upon his principal’s behalf. That seems to me to conflict with the principle that a man cannot contract with himself…. ‘ and ‘The whole basis of a contractual obligation is the agreement of two or more parties as to the act or thing to be done. This is as true of a lease as it is of any other kind of contract. It is impossible to conceive of a lease by a man in his own favour. The essence of a lease lies in the tenant’s right to exclusive possession of the subject let, and the landlord’s obligation to put and maintain him in that possession. I do not see how a man can contract with his own nominee to the effect that his own nominee is to be entitled to that exclusive possession against himself, this to be held for his own behoof. The truth of the matter is that the separate interests of landlord and tenant are incapable of creation by such an arrangement’ Lord Clyde: ‘But where the same person is both debtor and creditor in the same matter there can be no obligation created. It is in my view ineffective to enter into a contract with continuing mutual rights and obligations with oneself and it is whimsical to grant a lease of one’s own property to oneself (see Grey v Ellison ((1856) 1 Giff 438, 65 ER 990)). To attempt to grant a lease to a nominee for oneself seems to me a similarly barren exercise’. Lord Sutherland: ‘A contract of lease…involves the creation of mutual rights and obligations which can only be given any meaning if the contract is between two independent parties. [The nominees] had no interest of their own to enter into such a contract, any rights and obligations accruing thereunder being exercisable only as nominees for [the principals]. Under a normal lease the landlords cede occupation of the property to the tenants in return for certain obligations, but if the tenants are in fact mere nominees of the landlords the whole lease becomes a pure fiction. Accordingly, in the special circumstances of this case I am of the opinion that the purported lease is not a contract to which the law can give effect and must be treated as a nullity.’

Judges:

Lord President (Lord Hope) and Lords Sutherland and Clyde

Citations:

[1990] STC 657

Citing:

CitedHenderson v Astwood PC 1894
A sale was undertaken by a mortgagee, ostensibly to a third party but in reality to his nominee. The land was conveyed by the mortgagee to his nominee, who executed a declaration that he held the land in trust for the mortgagee, and who subsequently . .
CitedGreyv Ellison 1856
A policy of insurance was created in which one department of an insurance company purported to effect a contract with another department of the same company. Although different individuals were parties to the contract, they all contracted as agents . .

Cited by:

CitedIngram and Another v Inland Revenue Commissioners ChD 23-May-1995
Lady Ingram had first conveyed properties to her solicitor who on the next day let the properties back to her, and on the day after conveyed the freehold of the properties to her family.
Held: The leases in favour of Lady Ingram, having been . .
CitedIngram and Palmer-Tomkinson (Executors of the Estate of Lady Jane Lindsay Morgan Ingram Deceased) v Commissioners of Inland Revenue CA 28-Jul-1997
The deceased had first conveyed property to her solicitor. Leases back were then created in her favour, and then the freeholds were conveyed at her direction to her children and grandchildren. They were potentially exempt transfers.
Held: . .
CitedIngram and Another v Commissioners of Inland Revenue HL 10-Dec-1998
To protect her estate from Inheritance Tax, the deceased gave land to her solicitor, but then took back a lease. The solicitor then conveyed the land on freehold on to members of her family.
Held: The lease-back by the nominee was not void as . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax, Scotland, Landlord and Tenant

Updated: 30 April 2022; Ref: scu.223755

Re Barnes: 1939

A gift was made within three years of death. Under estate duty law it fell to be treated as property passing on the death. The deceased’s estate was heavily insolvent with a deficit of over andpound;90,000 and the executrix claimed that the aggregate of the virtually negligible personal estate and the preceding gift should be reduced by the total amount of the debts.
Held: ‘I am unable to agree with the construction of s.7, sub-s. I, contended for by the appellant. I think the words of the section contemplate liabilities of the estate which are met out of the estate, and I think that the last three lines of s.7, sub-s 1, in their natural meaning are inconsistent with the appellant’s case. I do not see how, in determining the value of an estate, allowance can be made for debts beyond the value of the assets out of which the debts are to be met. It is an unnatural use of words, in my view, to speak of making an allowance for a minus quantity in determining value. The appeal will therefore be dismissed, with costs.’

Judges:

Lawrence J

Citations:

[1939] 1 KB 316

Statutes:

Finance Act 1894 7

Cited by:

CitedGreen and Another v Inland Revenue ChD 11-Jan-2005
The deceased died intestate and with a negative valued personal estate, but with assets in trusts, including a revocable life interest in property. The question was whether his debts could be set off against the trusts interests to reduce them below . .
AppliedPeter John St. Barbe Green, David Robert Mitson (Trustees of the Will of Consuelo Dowager Duchess of Manchester v the Commissioners of Inland Revenue ChD 11-Jan-2005
The taxpayer appealed a notice of determination of liability of the estate for Inheritance Tax purposes. He sought to set off an excess of liabilities over assets in the deceased’s own estate against assets held in settlements.
Held: The . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 30 April 2022; Ref: scu.221018

Inland Revenue Commissioners v George and another: ChD 27 Feb 2003

The company ran a residential homes park. The users owned the caravans, but the taxpayer owned the land. They claimed exemption on a transfer of shares under section 104(1).
Held: The company was an investment company with section 105, and so could not claim the benefit of the section 104 exemption. It produced a profitable return on the exploitation of proprietorial rights. That in turn required a finding that the business constituted holding an investment, and services were ancillary to that.

Judges:

Laddie J

Citations:

Times 18-Mar-2003, Gazette 01-May-2003, [2003] STC 468

Statutes:

Inheritance Tax Act 1984 105 104

Jurisdiction:

England and Wales

Citing:

CitedWeston v Inland Revenue Commissioners ChD 29-Nov-2000
The taxpayer owned land upon which he ran a caravan park. Income was generated by pitch fees, and from commissions taken from the sales of caravans from one pitch owner to the next. The Commissioners asserted that the income was to be treated as . .
Appealed toGeorge and Loochin ( Executors of Stedman, Deceased) v The Commissioners of Inland Revenue CA 5-Dec-2003
The taxpayers appealed against a decision allowing an appeal by the respondents, that shares in a company which owned land from which it ran a residential caravan park, were shares in a business consisting wholly or mainly of making investments, and . .

Cited by:

Appeal fromGeorge and Loochin ( Executors of Stedman, Deceased) v The Commissioners of Inland Revenue CA 5-Dec-2003
The taxpayers appealed against a decision allowing an appeal by the respondents, that shares in a company which owned land from which it ran a residential caravan park, were shares in a business consisting wholly or mainly of making investments, and . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 28 April 2022; Ref: scu.180953

Inland Revenue v Earl of Buchan: HL 3 Dec 1908

The Succession Duty Act 1851, sec. 15, enacts-‘Where the title to any succession shall be accelerated by the surrender or extinction of any prior interests, then the duty thereon shall be payable at the same time and in the same manner as such duty would have been payable if no such acceleration had taken place.’
An heir of entail in possession of an entailed estate under an entail dated prior to 1848, in 1872 transferred his interest to his son, the next heir, born subsequent to 1848 and not yet twenty-five, for the purpose of certain family arrangements with a view to borrowing money. In 1875, on the son’s attaining twenty-five, the father and son applied for power to disentail, and disentailed. The son continued to possess the estate, and in 1905 the Crown claimed Succession Duty in respect of the succession on the father’s death, which had occurred in 1898.
Held that, under section 15 of the Succession Duty Act 1853, succession duty was exigible.

Judges:

Lord Chancellor (Loreburn), Lord Robertson, and Lord Collins

Citations:

[1908] UKHL 91, 46 SLR 91

Links:

Bailii

Jurisdiction:

Scotland

Inheritance Tax

Updated: 26 April 2022; Ref: scu.621530

Lord Advocate v Earl of Moray’s Trustees: HL 4 Aug 1905

The Finance Act 1894 by section 9 (5) makes provision that the person required to pay the estate-duty in respect of any property shall have power to raise the amount of such duty by the sale or mortgage of or a terminable charge on the property or any part thereof. Section 9 (6) enacts-‘A person having a limited interest in any property, who pays the estate-duty in respect of that property, shall be entitled to the like charge as if the estate-duty in respect of that property had been raised by means of a mortgage to him.’
Held 1st (approving the judgment of the First Division in Laurie, February 22, 1898, 25 R. 636, 35 S.L.R. 496) that an heir of entail in possession is ‘a person having a limited interest’ in the estate in the sense of the statute; and 2nd ( diss Lord Robertson- rev judgment of the First Division) that the executors of a deceased heir of entail are liable for estate-duty upon instalments of estate-duty paid by him, although no steps had been taken by him to perfect the charge on the estate, the instalments forming by force of the statute, and without any such steps being taken, a charge upon the estate transmissible by him and carried to them.
Opinion (per Lord Dunedin) that the charge upon the entailed estate formed by the instalments of estate-duty paid by the heir of entail in possession could be perfected by his executors by means of adjudication.
Observations on the application to Scotland of an imperial statute conceived in terms inappropriate to Scotland.

Judges:

Lord Chancellor (Halsbury), Lords Macnaghten, Davey, James Of Hereford, Robertson, and Dunedin

Citations:

[1905] UKHL 839, 42 SLR 839

Links:

Bailii

Jurisdiction:

Scotland

Inheritance Tax

Updated: 26 April 2022; Ref: scu.621188

Attorney General v Milne: HL 7 Apr 1914

Section 1 of the Finance Act 1894 enacts that estate duty should be leviable on the principal value of all property, real or personal, settled or not settled, which passes on the death of the deceased.
Section 2, sub-section 1, as amended by section 59 of the Finance (1909-10) Act 1910, enacts-‘Property passing on the death of the deceased shall be deemed to include’ property taken under a disposition purporting to act as an immediate gift inter vivos, unless the disposition was made three years before the death of the disponer.
Section 5, sub-section 1, enacts-When property in respect of which estate duty is leviable is settled by the will of the deceased, or having been settled by some other disposition passes under that disposition on the death of the deceased to some person not competent to dispose of the property (a) a further estate duty called settlement estate duty on the principal value of the settled property shall be levied.
Held that qua section 5 of the Finance Act 1894 the property must ‘pass at the death of the deceased,’ not constructively but actually. Therefore where an immediate life-interest is taken under a settlement, settlement estate duty is not payable under section 5, sub-section 1 (a), upon the death of the settlor within three years of the execution of the deed.
Judgment of the Court of Appeal, 1913, 2 Q.B. 606, affirmed, Lord Dunedin dissenting.

Judges:

Lord Chancellor (Viscount Haldane), Lords Dunedin, Atkinson, and Parker

Citations:

[1914] UKHL 636, 52 SLR 636

Links:

Bailii

Jurisdiction:

England and Wales

Inheritance Tax

Updated: 26 April 2022; Ref: scu.620710

Attorney General v Duke of Richmond: HL 26 Jul 1909

An heir of entail in possession of Scottish heritage carried out disentailing procedure. The heritage was disentailed, the valued interests of the succeeding heirs being charged thereon. This was admittedly done with the object of reducing the total value of the estate for estate duty purposes by the amounts so charged upon the lands. Held (Lords Collins and Shaw of Dunfermline diss.) that the interests charged upon the land were incumbrances created bona fide and wholly for the deceased’s own use and benefit, and that accordingly those amounts fell to be deducted from the deceased’s estate under section 7, sub-section 1 ( a), of the Finance Act 1894.
Per Lord Macnaghten – ‘The incumbrances intended to secure those debts were created bona fide in the only sense in which bona fides can be used in such a connection, that is to say, the debts and incumbrances were not fictitious or colourable, but real and genuine to all intents and purposes. Were these debts and incumbrances incurred and created ‘wholly for the deceased’s own use and benefit?’ . . . It seems to me that the words of the enactment are satisfied if the direct and immediate purpose of the person incurring the debt, or creating the incumbrance, is to make himself master of a sum of money over which he and he alone has power of disposition; and that it was not intended that there should be any inquiry into the ulterior and more remote purposes of the transaction or any investigation into motives.’

Judges:

Lord Chancellor (Loreburn), Lords Macnaghten, Atkinson, Collins, and Shaw

Citations:

[1909] UKHL 570

Links:

Bailii

Jurisdiction:

England and Wales

Inheritance Tax

Updated: 25 April 2022; Ref: scu.620585

Routier and Another v Revenue and Customs: SC 16 Oct 2019

A Jersey Charity created under a will of a Jersey resident was transfer to the UK, and reregistered with the UK Charity Commission. The Revenue sought to apply Inheritance Tax.
Held: Jersey was to be considered a third country for the purpose of a transfer of capital from the United Kingdom. The restriction of relief from inheritance tax to trusts governed by the law of a part of the United Kingdom is not supportable under EU law. Article 56 applies directly, must have effect in priority to inconsistent national law, whether judicial or legislative in origin.
Held: As the EU rules on free movement of capital do not apply in Jersey, Jersey is to be considered a third country for the purpose of a transfer of capital from the United Kingdom. Capital has moved from a member state where article 56 applies to a territory where it does not and that cannot be considered a purely internal situation. Accordingly, we would decline to make a preliminary reference on this point to the CJEU.
We conclude that article 56 EC applied to Mrs Coulter’s gift of assets in the United Kingdom to trustees in Jersey, that the refusal of relief from inheritance tax on that gift under section 23 of the Inheritance Tax Act was in breach of article 56, and that the appeal should therefore be allowed.

Judges:

Lady Hale (President), Lord Reed (Deputy President), Lord Carnwath, Lord Hodge, Lord Lloyd-Jones

Citations:

[2019] UKSC 43, [2019] STI 1722, [2019] WLR(D) 588, [2019] PTSR 1924, [2019] 3 WLR 757, [2019] STC 2182, UKSC 2017/0190

Links:

Bailii, Summary, WLRD, SC, SC Summary, SC Summary Video, SC 2019 Apr 02 am Video, SC 2019 Apr pm Video, SC 2019 Apr 03 am Video, SC 2019 Apr 03 pm Video

Statutes:

Inheritance Tax Act 1984 23

Jurisdiction:

England and Wales

Citing:

CitedJersey Produce Marketing Organisation (New Accessions) ECJ 8-Nov-2005
Europa Legislation on the export of potatoes from Jersey to the United Kingdom – 1972 Act of Accession – Protocol No 3 on the Channel Islands and the Isle of Man – Regulation No 706/73 – Articles 23 EC, 25 EC and . .
At ChDRoutier and Another v Revenue and Customs ChD 18-Sep-2014
Executors appealed against rejection of their claim that a gift in the will qualified for relief against Inheritance Tax as being a charitable gift. The Trusts concerned assets in Jersey.
Held: The appeal failed: ‘The expression ‘held on trust . .
At CA (2)Routier and Another v Revenue and Customs CA 17-Oct-2017
Inheritance tax, gifts to charities and freedom of capital . .
At CA (1)Routier and Another v Revenue and Customs CA 16-Sep-2016
Executors appealed against a decision that a residual gift in a will was not charitable and that it was therefore subject to Inheritance Tax arguing that the section if construed in this way was an unlawful restriction on the free movement of . .
CitedRoque v The Lieutenant Governor of Jersey ECJ 16-Jul-1998
(Judgment) Free movement of persons – Act of Accession 1972 – Protocol No 3 concerning the Channel Islands and the Isle of Man – Jersey
Article 4 of Protocol 3 to the Act of Accession did not prohibit a difference of treatment resulting from . .
CitedBarclay and Another, Regina (on The Application of) v Secretary of State for Justice and Others SC 22-Oct-2014
Constitutional Status of Chanel Islands considered
The Court was asked as to the role, if any, of the courts of England and Wales (including the Supreme Court) in the legislative process of one of the Channel Islands. It raised fundamental questions about the constitutional relationship between the . .
Citedvan der Kooy v Staatssecretaris van Financien ECJ 28-Jan-1999
Judgment – Part Four of the EC Treaty -? Article 227 of the EC Treaty ? Article 7(1)(a) of Sixth Directive 77/388/EEC ? Goods in free circulation in overseas countries and territories
Under the special arrangements applicable to the OCTs, . .
DeterminativePrunus (Free Movement Of Capital) ECJ 5-May-2011
Direct taxation – Free movement of capital – Article 64 TFEU – Legal persons established in a non-Member State – Ownership of immovable property located in a Member State – Tax on the market value of that property – Refusal of exemption – Assessment . .
CitedCommission v United Kingdom ECJ 23-Sep-2003
(Judgment) Failure of a Member State to fulfil its obligations – Failure to implement, in respect of Gibraltar, Directives 67/548/EEC and 87/18/EEC (concerning dangerous chemical substances); 93/12/EEC (concerning liquid fuels); 79/113/EEC, . .
CitedDepartment of Health and Social Security v Barr and Montrose Holdings (Judgment) ECJ 3-Jul-1991
Europa It follows from Article 1(3) of the Treaty of Accession 1972 in conjunction with Article 158 of the Act of Accession that the jurisdiction in preliminary ruling proceedings conferred on the Court by . .
CitedX BV v Staatssecretaris van Financien ECJ 5-Jun-2014
(Judgment) Free movement of capital – Restrictions – Payment of dividends from a Member State to an overseas territory of the same State – Scope of European Union law – Special European Union-OCTs arrangements . .
CitedThe Gibraltar Betting and Gaming Association v Revenue and Customs Commissioners and another (Government of Gibraltar intervening) ECJ 13-Jun-2017
ECJ Status of Gibraltar – Freedom To Provide Services – Purely Internal Situation – Inadmissibility : Judgment . .
CitedCommission v United Kingdom ECJ 21-Jul-2005
Europa Failure of a Member State to fulfil obligations – Directive 77/799/EEC – Mutual assistance by the competent authorities – Fields of VAT and excise duties – Partial transposition- Territory of Gibraltar. . .
CitedSpain v United Kingdom ECJ 12-Sep-2006
ECJ Law Governing – The Institutions – European Parliament – Elections – Right to vote – Commonwealth citizens residing in Gibraltar and not having citizenship of the Union. . .
CitedCamille and Henry Dreyfus Foundation Inc v Inland Revenue Commissioners HL 1956
The company was a foreign corporation constituted according to the laws of the state of New York for objects which were exclusively charitable according to the law of the United Kingdom.
Held: The term ‘charity’ does not include an institution . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax, Charity, European, Constitutional

Updated: 21 April 2022; Ref: scu.642829

Routier and Another v Revenue and Customs: CA 16 Sep 2016

Executors appealed against a decision that a residual gift in a will was not charitable and that it was therefore subject to Inheritance Tax arguing that the section if construed in this way was an unlawful restriction on the free movement of capital. The revenue contended that the gift by a Jersey resident was to a Jersey Trust which was not solely charitable not being subject only to UK law.
Held: The authority as to the charity point was unassailable and the trustees’ appeal on that point failed. However, the court could not reconcile the question as to freedom of movement under European law, and it asked the parties to consider a question for referral to the European Court of Justice.

Judges:

Moore-Bick VP CA, Tomlinson, Kitchin LJJ

Citations:

[2016] EWCA Civ 938, [2016] WLR(D) 496, [2016] STC 2218, [2016] BTC 38, [2016] STI 2653

Links:

Bailii, WLRD

Statutes:

Inheritance Tax Act 1984 23, TFEU 63, Income Tax Act 2007 989

Jurisdiction:

England and Wales

Citing:

At ChDRoutier and Another v Revenue and Customs ChD 18-Sep-2014
Executors appealed against rejection of their claim that a gift in the will qualified for relief against Inheritance Tax as being a charitable gift. The Trusts concerned assets in Jersey.
Held: The appeal failed: ‘The expression ‘held on trust . .
CitedCamille and Henry Dreyfus Foundation Inc v Inland Revenue Commissioners CA 1954
The Court considered whether it had jurisdiction to make an order with respect to a company registered in New York for objects which were charitable according to the laws of England.
Held: The Revenue’s appeal against a finding that the . .
CitedCamille and Henry Dreyfus Foundation Inc v Inland Revenue Commissioners HL 1956
The company was a foreign corporation constituted according to the laws of the state of New York for objects which were exclusively charitable according to the law of the United Kingdom.
Held: The term ‘charity’ does not include an institution . .
CitedBarras v Aberdeen Steam Trawling and Fishing Co HL 17-Mar-1933
The court looked at the inference that a statute’s draughtsman could be assumed when using a phrase to rely on a known interpretation of that phrase.
Viscount Buckmaster said: ‘It has long been a well established principle to be applied in the . .
CitedRoque v The Lieutenant Governor of Jersey ECJ 16-Jul-1998
(Judgment) Free movement of persons – Act of Accession 1972 – Protocol No 3 concerning the Channel Islands and the Isle of Man – Jersey . .
CitedHM Inspector of Taxes v Dextra Accessories Ltd HL 7-Jul-2005
The taxpayer companies had paid funds into a trust for employees. They sought to set off the payments against their liability to corporation tax. The revenue argued that they were deductible only in the year in which they were paid to the employees. . .

Cited by:

See AlsoRoutier and Another v Revenue and Customs CA 17-Oct-2017
Inheritance tax, gifts to charities and freedom of capital . .
At CA (1)Routier and Another v Revenue and Customs SC 16-Oct-2019
A Jersey Charity created under a will of a Jersey resident was transfer to the UK, and reregistered with the UK Charity Commission. The Revenue sought to apply Inheritance Tax.
Held: Jersey was to be considered a third country for the purpose . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax, Charity, European

Updated: 19 April 2022; Ref: scu.569895

Routier and Another v Revenue and Customs: CA 17 Oct 2017

Inheritance tax, gifts to charities and freedom of capital

Judges:

Arden LJ, Briggs of Westbourne L, Green J

Citations:

[2017] EWCA Civ 1584, [2017] WLR(D) 672, [2018] PTSR 1063, [2017] WTLR 1119, [2018] 1 WLR 3013, [2017] BTC 28, [2018] STC 910

Links:

Bailii, WLRD

Statutes:

Inheritance Tax Act 1984 23

Jurisdiction:

England and Wales

Citing:

See AlsoRoutier and Another v Revenue and Customs CA 16-Sep-2016
Executors appealed against a decision that a residual gift in a will was not charitable and that it was therefore subject to Inheritance Tax arguing that the section if construed in this way was an unlawful restriction on the free movement of . .

Cited by:

At CA (2)Routier and Another v Revenue and Customs SC 16-Oct-2019
A Jersey Charity created under a will of a Jersey resident was transfer to the UK, and reregistered with the UK Charity Commission. The Revenue sought to apply Inheritance Tax.
Held: Jersey was to be considered a third country for the purpose . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax, Charity

Updated: 19 April 2022; Ref: scu.597391

Routier and Another v Revenue and Customs: ChD 18 Sep 2014

Executors appealed against rejection of their claim that a gift in the will qualified for relief against Inheritance Tax as being a charitable gift. The Trusts concerned assets in Jersey.
Held: The appeal failed: ‘The expression ‘held on trust for charitable purposes’ in section 23(6) requires not only that the charitable purposes be UK law charitable purposes but that the relevant trust be subject to the jurisdiction of the United Kingdom courts as well.’
The reasoning of the Court of Appeal in Dreyfus applies to the wording of section 23 of the IHTA. The Coulter Trust did not qualify for exemption under either limb of subsection (6) because it was not governed by United Kingdom law but by Jersey law: ‘The Appellants have not put forward any good reason why Parliament should have intended that the second limb of section 23 should be so much broader than the first, encompassing trusts governed by foreign law but limited to charitable bodies established under UK law. Another important plank in the reasoning of the Court in Dreyfus was that the distinction drawn between the first limb of section 37 (namely income of any body of persons or trust established for charitable purposes) and the second limb of section 37 (namely income which according to the rule established by deed of trust or will are applicable to charitable purposes only) was intended only to distinguish between income held by bodies which are exclusively charitable on the one hand and bodies which are not exclusively charitable but which hold the relevant income for exclusively charitable purposes on the other. It was not intended to be a difference beyond that, allowing a much wider geographic range of bodies to fall within the second limb than could fall within the first. ‘

Judges:

Rose DBE J

Citations:

[2014] EWHC 3010 (Ch), [2014] BTC 42, [2014] WLR(D) 449, [2014] STI 2931, [2015] STC 451, [2015] PTSR 60, [2014] WTLR 1717

Links:

Bailii, WLRD

Statutes:

Inheritance Tax Act 1984 23

Jurisdiction:

England and Wales

Citing:

CitedCamille and Henry Dreyfus Foundation Inc v Inland Revenue Commissioners CA 1954
The Court considered whether it had jurisdiction to make an order with respect to a company registered in New York for objects which were charitable according to the laws of England.
Held: The Revenue’s appeal against a finding that the . .
CitedCamille and Henry Dreyfus Foundation Inc v Inland Revenue Commissioners HL 1956
The company was a foreign corporation constituted according to the laws of the state of New York for objects which were exclusively charitable according to the law of the United Kingdom.
Held: The term ‘charity’ does not include an institution . .
CitedHM Inspector of Taxes v Dextra Accessories Ltd HL 7-Jul-2005
The taxpayer companies had paid funds into a trust for employees. They sought to set off the payments against their liability to corporation tax. The revenue argued that they were deductible only in the year in which they were paid to the employees. . .

Cited by:

At ChDRoutier and Another v Revenue and Customs CA 16-Sep-2016
Executors appealed against a decision that a residual gift in a will was not charitable and that it was therefore subject to Inheritance Tax arguing that the section if construed in this way was an unlawful restriction on the free movement of . .
At ChDRoutier and Another v Revenue and Customs SC 16-Oct-2019
A Jersey Charity created under a will of a Jersey resident was transfer to the UK, and reregistered with the UK Charity Commission. The Revenue sought to apply Inheritance Tax.
Held: Jersey was to be considered a third country for the purpose . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax, Charity

Updated: 19 April 2022; Ref: scu.536733

Harris v Revenue and Customs (Inheritance Tax : Other): FTTTx 17 Apr 2018

INHERITANCE TAX – personal representative distributing assets of estate to beneficiary on basis that beneficiary would discharge IHT liability – appeal on basis that PR no longer has assets of estate – liability of personal representative – appeal struck out – s200 Inheritance Tax Act 1984 – Rule 8, Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009

Citations:

[2018] UKFTT 204 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Inheritance Tax

Updated: 14 April 2022; Ref: scu.609273

The Commissioners of Inland Revenue v Rysaffe Trustee Company (Ci) Limited: ChD 31 May 2002

The taxpayers had placed shares in the defendant company in foreign trusts.
Held: Under the general law, each brother had made five separate settlements; that s 43 did not reduce the five settlements to one settlement; that there were five charges to Inheritance Tax; and that, to bring the property within the charge to tax, it was neither appropriate nor necessary to consider whether the five settlements were created by ‘associated operations’.

Judges:

Park J

Citations:

[2002] STC 872

Statutes:

Inheritance Tax Act 1984 43

Jurisdiction:

England and Wales

Citing:

Appealed toThe Commissioners of Inland Revenue v Rysaffe Trustee Company (CI) Limited CA 20-Mar-2003
The taxpayers had repeatedly settled shares in the taxpayer company in foreign trusts. The Commissioners sought to use the special legislative regime, imposing a periodic charge to Inheritance Tax on discretionary trusts.
Held: Inheritance Tax . .

Cited by:

Appeal fromThe Commissioners of Inland Revenue v Rysaffe Trustee Company (CI) Limited CA 20-Mar-2003
The taxpayers had repeatedly settled shares in the taxpayer company in foreign trusts. The Commissioners sought to use the special legislative regime, imposing a periodic charge to Inheritance Tax on discretionary trusts.
Held: Inheritance Tax . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 11 April 2022; Ref: scu.180027

Weston v Inland Revenue Commissioners: ChD 29 Nov 2000

The taxpayer owned land upon which he ran a caravan park. Income was generated by pitch fees, and from commissions taken from the sales of caravans from one pitch owner to the next. The Commissioners asserted that the income was to be treated as investment income. Income from land is generally investment income, and, on balance, the income from pitch fees was the real business rather than the more occasional commissions, and that, accordingly, the income was investment income, and the business was in ‘making or holding investments’.
Held: The taxpayer was not entitled to relief on the basis that it was a business.

Judges:

Lawrance Collins J

Citations:

Times 29-Nov-2000, Gazette 11-Jan-2001

Statutes:

Inheritance Tax Act 1984

Cited by:

CitedInland Revenue Commissioners v George and another ChD 27-Feb-2003
The company ran a residential homes park. The users owned the caravans, but the taxpayer owned the land. They claimed exemption on a transfer of shares under section 104(1).
Held: The company was an investment company with section 105, and so . .
CitedWright and Another v Gater and Others ChD 7-Nov-2011
The beneficiary, a child was to inherit estates of his grandparents and parents, all of which were intestate. An application was made to vary the provisions in order to reduce the liability to Inheritance Tax.
Held: A deferment of vesting . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 10 April 2022; Ref: scu.90431

Fitzwilliam (Countess) and Others v Inland Revenue Commissioners: HL 9 Jul 1993

An Inheritance Tax avoidance scheme was valid. When testing whether a series of pre-ordained steps could be viewed as one artificial whole, it was not open to the Commissioners to pick and to choose which steps were to be counted. The exercise became artificial when some were excluded at the option of the commissioners. Pre-planning of steps alone not sufficient to attract Ramsay interpretation

Citations:

Times 09-Jul-1993, Gazette 08-Dec-1993, Ind Summary 19-Jul-1993

Statutes:

Finance Act 1975 Schedule 5

Inheritance Tax, Taxes Management

Updated: 08 April 2022; Ref: scu.80587