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

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

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: 15 May 2022; Ref: scu.396609

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

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

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: 10 May 2022; Ref: scu.83617

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

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)

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: 08 April 2022; Ref: scu.82331

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

Wills and Probate, Inheritance Tax

Updated: 08 April 2022; Ref: scu.82349

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)

Inheritance Tax

Updated: 08 April 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

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: 08 April 2022; Ref: scu.82145

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

HM Revenue and Customs v Personal Representatives of Nicolette Pawson: UTTC 28 Jan 2013

UTTC Inheritance tax – business property relief – holiday letting business of a bungalow carried on for profit – whether the business consisted mainly of holding an investment – whether the FTT erred in law in concluding that it did so consist – appeal allowed.

Citations:

[2013] UKUT 50 (TCC)

Links:

Bailii

Jurisdiction:

England and Wales

Inheritance Tax

Updated: 27 March 2022; Ref: scu.509165

Buzzoni 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

Citations:

[2011] UKFTT 267 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Cited by:

Appeal fromBuzzoni 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. . .
At FTTTxBuzzoni 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: 26 March 2022; Ref: scu.442964

Lord Advocate v Sprot’s Trustees: HL 15 May 1902

Where money was held by trustees under a direction to apply it in the purchase of lands in Scotland or England to be entailed upon a certain series of heirs, held that this money was not ‘entailed estate’ within the meaning of section 23 of the Finance Act 1894, and was consequently not liable to estate duty and settlement estate duty under sub-section 16 of that section.
Judgment of the First Division affirmed, but upon a different ground.
Opinions per Lord Macnaghten, Lord Brampton, Lord Robertson, and Lord Lindley (differing from the judgment of the First Division) that money held in trust for the purchase of lands in Scotland to be entailed under the law of Scotland is ‘entailed estate’ within the meaning of section 23 of the Finance Act 1894, and is consequently liable to estate duty and settlement estate duty under sub-section (16) of that section.
Opinion per Lord Shand contra.

Judges:

Lord Chancellor (Halsbury), and Lords Macnaghten, Shand, Brampton, Robertson, and Lindley

Citations:

[1902] UKHL 617, 39 SLR 617

Links:

Bailii

Jurisdiction:

Scotland

Inheritance Tax

Updated: 23 March 2022; Ref: scu.630796

Ashcroft v Barnsdale and Others: ChD 30 Jul 2010

The parties sought to rectify a deed of family arrangement varying a will. The variation deed had had several mistakes which in fact increased the sum of Inheritance Tax owed. HMRC refused to accept the rectification deed unless approved by the court.
Held: The request for rectification was granted. The claimant had demonstrated a specific common intention as to how the parties’ fiscal objectives were to be achieved; and that, owing to a mistake in the way in which that intention was expressed in the Deed of Variation, effect had not been given to that intention.
Hodge J QC said: ‘The court cannot rectify a document merely because it fails to achieve the fiscal objectives of the parties to it. A mere misapprehension as to the tax consequences of executing a particular document will not justify an order for its rectification. The specific intention of the parties as to how the fiscal objective was to be achieved must be shown if the court is to order rectification. The court will order the rectification of a document only if it is satisfied by cogent evidence (sufficient to counteract the effect of the parties’ subscription to the relevant document) that: (1) the document does not give effect to the true agreement or arrangement between the parties, and (2) there is an issue, capable of being contested, between the parties; it being irrelevant, first, that rectification of the document is sought or consented to by all of them; and, secondly, that rectification is desired because it has beneficial fiscal consequences. Conversely, the court will not order rectification of a document if the parties’ rights will be unaffected, and if the only effect of the order will be to secure a fiscal benefit for one or more of them.’

Judges:

Hodge J QC

Citations:

[2010] EWHC 1948 (Ch)

Links:

Bailii

Statutes:

Inheritance Tax Act 1984 211

Jurisdiction:

England and Wales

Citing:

CitedWhiteside v Whiteside CA 1950
The husband had executed a deed in favour of his former wife after dissolution of their marriage covenanting to pay a specified sum per annum free of income tax up to but not exceeding a stated amount. This provision was in substitution for one . .
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 . .
CitedRacal Group Services Limited v Ashmore CA 1995
The company had covenanted to pay an annual sum to charity. Since the last payment under the covenant was to be made less than three years after the execution of the deed, an intended tax advantage was not secured.
Held: The company’s appeal . .
CitedAllnutt and Another v Wilding and others; Re Strain (deceased) CA 3-Apr-2007
The trustees of a discretionary settlement requested its rectification on the basis that the now deceased settlor’s solicitor had mistakenly not appreciated the need to confer interests in possession on the beneficiaries, with the consequence that . .
CitedOun v Ahmad ChD 19-Mar-2008
The parties agreed in writing for the sale of leasehold property to the claimant. One document had been signed, but later one said that it had not included an aportionment. Another document then set out the apportionment. When the defendant refused . .
CitedChartbrook Ltd v Persimmon Homes Ltd and Others HL 1-Jul-2009
Mutual Knowledge admissible to construe contract
The parties had entered into a development contract in respect of a site in Wandsworth, under which balancing compensation was to be paid. They disagreed as to its calculation. Persimmon sought rectification to reflect the negotiations.
Held: . .
Lists of cited by and citing cases may be incomplete.

Wills and Probate, Equity, Inheritance Tax

Updated: 06 February 2022; Ref: scu.421236

Gray v Inland Revenue Commissioners: CA 24 Feb 1994

Partnership interests in a tenanted freehold estate can be valued together. The court considered the ‘statutory hypothetical sale’ when valuing property for Inheritance Tax purposes: ‘The property must be assumed to have been capable of sale in the open market, even if in fact it was inherently unassignable or held subject to restrictions on sale. The question is what a purchaser in the open market would have paid to enjoy whatever rights attached to the property at the relevant date (see IRC v Crossman [1937] AC 26). Furthermore, the hypothesis 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 putting it on the market (see Duke of Buccleuch v IRC [1967] 1 AC 506 at 525). To this extent, but only to this extent, the express terms of the statute may introduce an element of artificiality into the hypothesis. In all other respects, the theme which runs through the authorities is that one assumes that the hypothetical vendor and purchaser did whatever reasonable people buying and selling such property would be likely to have done in real life.

Judges:

Hoffmann LJ

Citations:

Times 24-Feb-1994, [1994] STC 360

Statutes:

Inheritance Taxes Act 1974

Jurisdiction:

England and Wales

Citing:

CitedInland Revenue Commissioners v Crossman HL 1937
For a valuation for estate taxes, the value is what a purchaser in the open market would have paid to enjoy whatever rights attached to the property at the relevant date.
Lord Russell of Killowen said that a share is the interest of a . .
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 . .

Cited by:

CitedRyde International Plc v London Regional Transport CA 5-Mar-2004
The landowner had developed land which was then made the subject of compulsory purchase. The court was asked how the compensation was to be calculated. The landowner expected to sell the development as a whole. The respondent argued that the profit . .
CitedTelereal Trillium v Hewitt (Valuation Officer) SC 15-May-2019
The court considered correct approach to determination of the rateable value of an office building, in circumstances where the evidence showed at the relevant time a general demand in the area for comparable office buildings, but no actual tenant . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 06 February 2022; Ref: scu.80993

Moss, Executor of David Owen (Deceased) v Revenue and Customs (Whether To Give Permission for Late Appeal To Be Made To HMRC – Martland – Inheritance Tax): FTTTx 11 Nov 2019

PROCEDURE – whether to give permission for late appeal to be made to HMRC – Martland – Inheritance Tax

Citations:

[2019] UKFTT 686 (TC)

Links:

Bailii

Jurisdiction:

England and Wales

Citing:

CitedMartland v The Commissioners for HM Revenue and Customs (Tax) UTTC 1-Jun-2018
Exercise of Discretion to hear Late Appeals
Excise Duty – assessment to duty and wrongdoing penalty – application for permission to make late appeal – test to be applied – appeal dismissed
The tribunal discussed the jurisdiction of the First Tier Tribunal to allow an appeal to be made . .
Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 03 February 2022; Ref: scu.646899

Burrell 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 declared invalid that part of the appointment which dealt with the shares.

The Honourable Mr Justice Mann
[2005] EWHC 245 (Ch), (2004-05) 7 ITELR 622, [2005] Pens LR 289, [2005] WTLR 313, [2005] BTC 8011, [2005] STC 569
Bailii
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 . .
CitedStannard v Fisons Pension Trust Limited CA 1991
Fisons had sold their fertiliser division to Norsk Hydro. Acting on advice of actuaries and thinking that the fund was in deficit, the trustees made a transfer to a new fund to provide for pensions of transferring employees in accordance with a . .
AppliedAbacus Trust Company (Isle of Man) Ltd and Another v National Society for the Prevention of Cruelty to Children ChD 17-Jul-2001
The claimants were beneficiaries, trustee and protector of a trust fund. In order to mitigate Capital Gains Tax liability they sought advice, and, following that advice, entered into a deed of gift in favour of the respondent charity. The deed . .

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 . .
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 . .
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.

Trusts, Inheritance Tax

Updated: 15 January 2022; Ref: scu.223296

Der Merwe v Goldman and Others: ChD 11 Apr 2016

The claimants had executed a deed creating a trust of their house, in ignorance of tax changes making such an arrangement liable to Inheritance Tax. The claimant now sought the setting aside of the settlement.
Held: The order was made, no consideration having been given.

Morgan J
[2016] EWHC 790 (Ch), [2016] WLR(D) 179, [2016] 4 WLR 71, [2016] WTLR 913
Bailii, WLRD
Inheritance Tax Act 1984 1 2 3
England and Wales

Inheritance Tax, Equity

Updated: 13 January 2022; Ref: scu.562026

Hanson v Revenue and Customs: FTTTx 31 Jan 2012

INHERITANCE TAX – deemed transfer on death – deceased’s estate included a farmhouse – whether the Appellant, who had been in occupation of the farmhouse at the date of the death and for some years prior thereto and had incurred expenditure on the farmhouse, had acquired an equitable interest in the farmhouse such as to reduce or eliminate the value attributable thereto which ought to be included in the deceased’s estate – held, no – whether the farmhouse was agricultural property within section 115(2) Inheritance Tax Act 1984 – nature of the nexus required between a farmhouse and the agricultural land or pasture etc. in the definition – whether such nexus was occupation and ownership or only occupation – held, the nexus is only occupation – Special Commissioner’s decision in Rosser v IRC [2003] STC (SCD) 311 not followed – appeal allowed

[2012] UKFTT 95 (TC), [2012] SFTD 705, [2012] STI 1388, [2012] WTLR 597
Bailii
England and Wales

Inheritance Tax

Updated: 10 January 2022; Ref: scu.451936

Inland Revenue v Hamilton: HL 21 Jul 1919

The Succession Duty Act 1853, section 2, enacts-‘Every past or future disposition of property by reason whereof any person has or shall become beneficially entitled to any property or the income thereof upon the death of any person dying after the time appointed for the commencement of this Act, either immediately or after an interval, either certainly or contingently, and either originally or by way of substitutive limitation, and every devolution by law of any beneficial interest in property or the income thereof, upon the death of any person dying after the time appointed for the commencement of this Act, to any other person in possession or expectancy, shall be deemed to have conferred or to confer on the person entitled by reason of any such disposition or devolution a succession; and the term ‘successor’ shall denote the person so entitled; and the term ‘predecessor’ shall denote the settlor, dis-poner, testator, obligor, ancestor, or other person from whom the interest of the successor is or shall be derived.’
A proprietor by entail settled his estate upon himself and the heirs of his body, whom failing upon his brother and the heirs-male of his body, ‘whom failing the heirs-female of the body of the said’ brother.
The succession having opened to an heir-female of the body of the brother after he and his heirs-male had successively held the estate, held that the heir-female took, for the purposes of the Succession Duty Act 1853, by disposition not by devolution by law, and that her predecessor was the settlor and not her father, the last heir-female of the brother.
Lord Advocate v. M’Culloch, 1895, 22 R. 356, 32 S.L.R. 266, approved.
The Finance (1909-10) Act 1910, section 58, increases succession duty in certain cases, ‘in the case of a succession arising under a disposition only if the first succession under the disposition arises on or after’ 30th April 1909. Held that ‘the first succession’ meant the first taking which involved liability for payment of duty under the Succession Duty Act.

Viscount Finlay, Viscount Haldane, Viscount Cave, Lord Dunedin, and Lord Shaw
[1919] UKHL 524, 56 SLR 524
Bailii
Scotland

Inheritance Tax

Updated: 10 January 2022; Ref: scu.632780

Hood v Revenue and Customs: FTTTx 2 Feb 2016

Inheritance Tax : Gifts – – deceased granted reversionary sub-lease to sons out of her head leasehold interest – licence to sub-let given by head landlord to deceased – sub-lease provided for same covenants, including repairing covenants, as in head lease – whether property disposed of by way of gift was subject to a reservation under s 102 FA 1986 – application of second limb of s 102(1)(b) – identification of donated property – whether benefit ‘trenched upon’ donees’ enjoyment of the donated property – Buzzoni considered

[2016] UKFTT 59 (TC), [2016] SFTD 351, [2016] STI 1159, [2016] WTLR 835
Bailii
England and Wales

Inheritance Tax

Updated: 10 January 2022; Ref: scu.559927

Barclays Wealth Trustees (Jersey) Ltd and Another v HM Revenue and Customs: ChD 15 Oct 2015

Appeal by the taxpayer against a determination of a liability for inheritance tax said to arise in relation to the 10 year charge applicable to trusts. At the heart of the case is the question of whether certain property is ‘excluded property’ for the purposes of the legislation.

Mann J
[2015] EWHC 2878 (Ch)
Bailii
England and Wales

Inheritance Tax

Updated: 04 January 2022; Ref: scu.553498

Yvon Welte v Finanzamt Velbert: ECJ 12 Jun 2013

ECJ Opinion – Free movement of capital – Articles 56 EC, 57 EC and 58 EC – Inheritance tax – Deceased and heir resident in Switzerland – Direct investment – Investment in real estate – Standstill clause – Justification

Mengozzi AG
C-181/12, [2013] EUECJ C-181/12
Bailii
European
Cited by:
OpinionYvon Welte v Finanzamt Velbert ECJ 17-Oct-2013
Free movement of capital – Articles 56 EC to 58 EC – Inheritance tax – Deceased person and heir resident in a third country – Estate – Immovable property located in a Member State – Right to an allowance against the taxable value – Different . .

Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 04 January 2022; Ref: scu.511019

Green v Revenue and Customs: FTTTx 8 Jul 2015

FTTTx Inheritance Tax : Business/Agricultural Reliefs – INHERITANCE TAX – whether appeal automatically struck out – whether Appellant should be permitted to give oral evidence – Appellant’s lifetime transfers to a settlement – furnished holiday letting business – whether relevant business property – whether business consisted mainly of the making and/or holding of investments – yes – appeal dismissed.

[2015] UKFTT 334 (TC)
Bailii
England and Wales

Inheritance Tax

Updated: 02 January 2022; Ref: scu.550297

Green v Revenue and Customs: FTTTx 21 May 2015

FTTTx INHERITANCE TAX – whether appeal automatically struck out – whether Appellant should be permitted to give oral evidence – Appellant’s lifetime transfers to a settlement – furnished holiday letting business – whether relevant business property – whether business consisted mainly of the making and/or holding of investments – yes – appeal dismissed.

[2015] UKFTT 236 (TC)
Bailii
England and Wales

Inheritance Tax

Updated: 01 January 2022; Ref: scu.549504

Golding and Another v Revenue and Customs (Inheritance Tax : Agricultural Reliefs): FTTTx 18 May 2011

Exempt transfer and relief- Agricultural property relief- farmhouse whether ‘character appropriate’ to 16.29 acres of agricultural land with adjacent agricultural buildings – Yes – farmed by deceased up to the date of his death – Inheritance Tax Act 1984 section 115 (2) relief granted.

[2011] UKFTT 351 (TC), [2011] WTLR 1183
Bailii
England and Wales

Inheritance Tax

Updated: 01 January 2022; Ref: scu.443039

Meena Seddon Settlement v Revenue and Customs: FTTTx 9 Apr 2015

FTTTx INHERITANCE TAX – settled property – scrip dividends – whether income or capital – whether property comprised in the settlement for the purposes of an exit charge before the first 10 year anniversary – Inheritance Tax Act 1984, s68(5)(c) – appeal dismissed

[2015] UKFTT 140 (TC), [2015] WTLR 1103, [2015] SFTD 539
Bailii
England and Wales

Inheritance Tax

Updated: 30 December 2021; Ref: scu.546588

Yvon Welte v Finanzamt Velbert: ECJ 17 Oct 2013

Free movement of capital – Articles 56 EC to 58 EC – Inheritance tax – Deceased person and heir resident in a third country – Estate – Immovable property located in a Member State – Right to an allowance against the taxable value – Different treatment of residents and non-residents

M Ilesic P
[2013] EUECJ C-181/12, ECLI:EU:C:2013:662
Bailii
Citing:
OpinionYvon Welte v Finanzamt Velbert ECJ 12-Jun-2013
ECJ Opinion – Free movement of capital – Articles 56 EC, 57 EC and 58 EC – Inheritance tax – Deceased and heir resident in Switzerland – Direct investment – Investment in real estate – Standstill clause – . .

Lists of cited by and citing cases may be incomplete.

Inheritance Tax, European

Updated: 29 December 2021; Ref: scu.545150

Gilchrist v Revenue and Customs: UTTC 11 Apr 2014

INHERITANCE TAX – discretionary settlement – 10-year charge – whether the proceeds of sale of scrip dividend shares to which s.249 ICTA 1988 applies are deemed to be income not only for the purposes of ICTA 1988 but also for the purposes of trust law generally and for the purposes of Inheritance Tax

[2014] UKUT 169 (TCC), [2015] CH 183, [2014] WTLR 1209, [2014] WLR(D) 205, [2015] 2 WLR 1, [2014] STC 1713, [2014] BTC 513, [2014] STI 1875, [2014] 4 All ER 943
Bailii
England and Wales

Inheritance Tax

Updated: 03 December 2021; Ref: scu.525881

Buzzoni and Others v Revenue and Customs, Re The Estate of Lia Kamhi (Deceased)): CA 19 Dec 2013

Moses, Black, Gloster LJJJ
[2013] EWCA Civ 1684
Bailii
Finance Act 1986
England and Wales
Citing:
At FTTTxBuzzoni 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 . .
Appeal fromBuzzoni 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. . .

Lists of cited by and citing cases may be incomplete.

Landlord and Tenant, Inheritance Tax

Updated: 28 November 2021; Ref: scu.519316

Price v Revenue and Customs: FTTTx 7 Oct 2010

INHERITANCE TAX – Related property provisions – what is the proper construction of the words ‘the appropriate portion of the value of the aggregate of that and any related property’ in section 161(1) IHTA? – Appellant contending that the concept of the aggregate of two properties cannot connote their transformation into a different description of property – HMRC contending that the aggregation required the deceased’s undivided half share in a property to be taken together with her spouse’s identical undivided half share, with the result that the freehold of the property with vacant possession was the subject of the required valuation – section 161(3) IHTA which provides the meaning of ‘the appropriate portion’ also construed – held following IRC v Gray that ‘the value of the aggregate’ was to be taken to be the price which the two items of property would fetch in the open market if offered for sale at the same time – held further that no deduction from the value was to be made on account of the notional costs of selling or the liabilities charged on the property- HMRC’s Determination upheld in principle – further valuation points to be referred to the Upper Tribunal pursuant to section 222(4A) IHTA if not agreed

[2010] UKFTT 474 (TC), [2011] WTLR 161, [2011] STI 310, [2011] SFTD 52
Bailii
England and Wales

Inheritance Tax

Updated: 22 November 2021; Ref: scu.426639

HM Revenue and Customs v Hanson (As Trustee of The William Hanson 1957 Settlement): UTTC 17 May 2013

UTTTC INHERITANCE TAX – deemed transfer on death – deceased’s estate included a farmhouse – whether the farmhouse was agricultural property within section 115(2) Inheritance Tax Act 1984 – nature of the nexus required between a farmhouse and the agricultural land or pasture etc. in the definition – whether such nexus was occupation and ownership or only occupation -held, the nexus is only occupation – Special Commissioner’s decision in Rosser v IRC [2003] STC (SCD) 311 not followed – appeal from Tax Chamber dismissed.

Warren J
[2013] UKUT 224 (TCC)
Bailii
England and Wales

Inheritance Tax

Updated: 12 November 2021; Ref: scu.510298

Scheunemann v Finanzamt Bremerhaven: ECJ 19 Jul 2012

ECJ Freedom of establishment – Free movement of capital – Direct taxation – Inheritance tax – Conditions for the calculation of the tax – Acquisition through inheritance of a shareholding, as sole shareholder, in a capital company established in a third country – National legislation excluding shareholdings in such companies from tax advantages

Cunha Rodrigues P
[2012] EUECJ C-31/11 – O
Bailii
European
Citing:
OpinionScheunemann v Finanzamt Bremerhaven ECJ 20-Mar-2012
ECJ Fundamental freedoms – Delimitation – Freedom of establishment – Article 49 TFEU – Free movement of capital – Article 63 TFEU – Inheritance tax – Acquisition by inheritance of a shareholding, forming part of . .

Lists of cited by and citing cases may be incomplete.

European, Inheritance Tax, Company

Updated: 11 November 2021; Ref: scu.466287

Fryer and Others v Revenue and Customs: FTTTx 17 Feb 2010

FTTTx Inheritance Tax – pension policy – potential death benefits held in discretionary trust – rights to pension benefits retained by policyholder – policyholder terminally ill – whether omission to opt to take retirement benefits diminished policyholder’s estate and increased that of discretionary trust – yes – valuation of diminution in estate – appeal dismissed subject to variation of determination and adjustment of value of diminution

[2010] UKFTT 87 (TC), [2010] SFTD 632, [2010] WTLR 815
Bailii
England and Wales

Inheritance Tax

Updated: 11 November 2021; Ref: scu.408924

Commission v Germany: ECJ 4 Sep 2014

comm_germanyECJ1409

ECJ (Judgment) Failure to fulfill obligations – Article 63 TFEU – Free movement of capital – Tax on gifts and estates – National legislation providing for a higher deduction if the deceased at his death, the donor or recipient residing in the territory of the Member State – Purpose of infringement proceedings – Restriction – Justification

Ilesic P
C-211/13, [2014] EUECJ C-211/13
Bailii

European, Inheritance Tax

Updated: 11 November 2021; Ref: scu.536447

Revenue and Customs v Evans: FTTTx 25 Jun 2014

FTTTx INHERITANCE TAX – failure to lodge inheritance tax return on death of life tenant – trustee’s failure to respond to all correspondence from 13 August 2010 including appearing at the hearing – case heard in appellant’s absence- penalty andpound;100 for initial failure, a further penalty of andpound;100 for the continuing failure and a penalty of andpound;60 per day incurred from the date of the hearing until the return is lodged.

David Porter TJ
[2014] UKFTT 628 (TC)
Bailii
England and Wales

Inheritance Tax

Updated: 11 November 2021; Ref: scu.533708

McArthur, Executors of v Revenue and Customs: SCIT 9 Jul 2008

Share Valuations for IHT

SCIT Inheritance Tax; share valuation; convertible unsecured loan stock; family companies; whether option to take shares valid or in doubt; whether options prescribed; effect on valuation of conversion rights; valuation assumptions; percentage deduction for minority and majority shareholdings; Inheritance Tax Act 1984 sections 4, 160, and 168(1); Prescription and Limitation (Scotland) Act 1973 Schedule 2 paragraph 2(2)(b).

[2008] UKSPC SPC00700
Bailii
England and Wales

Inheritance Tax

Updated: 10 November 2021; Ref: scu.273107

Atkinson and Another v Revenue and Customs: FTTTx 10 Mar 2010

FTTTx Inheritance Tax – Exempt transfers and relief – Agricultural property relief – Farm owned by deceased and let to family farming partnership – Deceased as partner lived in bungalow on the farm until ill-health required him to move to care home – Deceased made occasional visits to bungalow and his possessions remained in it until his death – Whether throughout the seven year period ending with his death the bungalow was occupied by the deceased or another for the purposes of agriculture – Yes – IHTA 1984 section 117(b).

[2010] UKFTT 108 (TC)
Bailii
Inheritance Tax Act 1984 117(b)
England and Wales

Inheritance Tax

Updated: 09 November 2021; Ref: scu.408947

Smith and Others v Her Majesty’s Revenue and Customs: SCIT 18 Mar 2009

SCIT Inheritance tax – Death – liability for tax – building society account not notified prior to issue of Clearance – account part of deceased’s estate for inheritance tax purposes – estate distributed by executors before they realised that account part of taxable estate – nature of asset – whether settled property – persons liable for tax attributable to property in account – persons liable for tax attributable to other assets – Inheritance Tax Act 1984 sections 4,5,43(3),200,204 and 211

Powell J
[2009] UKVAT SPC00742, [2009] WTLR 691, [2009] STC (SCD) 386, [2009] STI 1102
Bailii
Inheritance Tax Act 1984
England and Wales

Inheritance Tax

Leading Case

Updated: 09 November 2021; Ref: scu.373756

Verdegaal, The Executors of The Estate of v Revenue and Customs: FTTTx 9 Sep 2014

FTTTx INCOME TAX – penalties and surcharges for late payment – penalties for late filing – interaction with inheritance tax IHT200 form – outside the time limit to amend – provisional returns not filed – whether actions of advisers provided reasonable excuse – no – whether reliance on advisers provided reasonable excuse – no – whether special circumstances – no – appeals dismissed and penalties upheld

[2014] UKFTT 878 (TC)
Bailii
England and Wales

Income Tax, Inheritance Tax

Updated: 02 November 2021; Ref: scu.536516

Missionswerk Werner Heukelbach eV v Etat belge (Taxation): ECJ 10 Feb 2011

ECJ Direct taxation – Free movement of capital – Inheritance tax – Legacies in favour of non-profit-making bodies – Refusal to apply a reduced rate where those bodies have their centre of operations in a Member State other than that in which the deceased had actually lived or worked – Restriction – Justification.

C-25/10, [2011] EUECJ C-25/10
Bailii
European

Inheritance Tax

Updated: 02 November 2021; Ref: scu.430215

Burden and Burden v The United Kingdom: ECHR 12 Dec 2006

Sisters,Together always not Discriminated Against

(Grand Chamber) The claimants were sisters who had lived together all their lives and owned property jointly. They complained that the Inheritance Tax regime treated them worse than it would a married couple, and was discriminatory.
Held: Whilst some protections had been extended to give relief to same sex partnerships, it still did not assist those in the claimants’ position. Given that there was no domestic remedy available, the applicants had been correct to apply direct to the court, and no time limit applied. However, even assuming that the applicants could be compared to a couple in a married or same sex relationship, the difference in treatment was not inconsistent with article 14.
The difference of treatment for the purposes of the grant of social security benefits, between an unmarried applicant who had a long-term relationship with the deceased, and a widow in the same situation, was justified, marriage remaining an institution that was widely accepted as conferring a particular status on those who entered it, and the respondent was not to be criticised for pursuing taxation policies designed to promote marriage; nor for making available those advantages to committed homosexual couples. The difference in treatment was justified.

J. Casadevall, President and Judges Sir Nicolas Bratza, G. Bonello, K. Traja, S Pavlovschi, L. Garlicki and L. Mijovic, Section Registrar T.L. Early
13378/05, [2006] ECHR 1064, (2007) 44 EHRR 51, 21 BHRC 640, [2007] STI 106, [2008] STI 1279, [2007] 1 FCR 69, [2007] STC 252, 9 ITL Rep 535, [2007] WTLR 607
Bailii
European Convention on Human Rights, Inheritance Tax Act 1984 18(1)
Human Rights
Cited by:
CitedIn re P and Others, (Adoption: Unmarried couple) (Northern Ireland); In re G HL 18-Jun-2008
The applicants complained that as an unmarried couple they had been excluded from consideration as adopters.
Held: Northern Ireland legislation had not moved in the same way as it had for other jurisdictions within the UK. The greater . .
See AlsoBurden and Burden v The United Kingdom ECHR 29-Apr-2008
(Grand Chamber) The claimants were sisters who had lived together all their lives. They complained of discrimination in their treatment under the Inheritance Tax system as opposed to the treatment of a same sex couple living in a sexual . .
CitedCarson and Others v The United Kingdom ECHR 4-Nov-2008
(Grand Chamber) Pensioners who had moved abroad complained that they had been excluded from the index-linked uprating of pensions given to pensioners living in England.
Held: This was not an infringement of their human rights. Differences in . .
See AlsoBurden and Burden v The United Kingdom ECHR 11-Sep-2007
The claimants were sisters who had lived together all their lives. They complained of discrimination in their treatment under the Inheritance Tax system as opposed to the treatment of a same sex couple living in a sexual relationship. . .
CitedEweida And Others v The United Kingdom ECHR 15-Jan-2013
Eweida_ukECHR2013
The named claimant had been employed by British Airways. She was a committed Christian and wished to wear a small crucifix on a chain around her neck. This breached the then dress code and she was dismissed. Her appeals had failed. Other claimants . .
CitedThe Church of Jesus Christ of Latter-Day Saints v United Kingdom ECHR 4-Mar-2014
latterdayECHR0314
The claimant said that it had been wrongfully deprived of relief from business rates for its two temples. It asserted that it was a religion, and that the treatment was discriminatory. The government said that the refusal was on the basis alone that . .

Lists of cited by and citing cases may be incomplete.

Human Rights, Inheritance Tax, Discrimination, Family

Leading Case

Updated: 02 November 2021; Ref: scu.248125

Lau v Her Majesty’s Revenue and Customs: SCIT 18 Mar 2009

lau_hmrcSCIT

SCIT INHERITANCE TAX – DISCLAIMER OF BENEFIT – The Appellant was joint executor and residuary beneficiary of her late husband’s estate – The Appellant paid andpound;1 million to her son who had renounced a legacy of andpound;665,000 under the Will of his step father – The Appellant contended that the payment of andpound;1 million was unconnected with her son’s renunciation – the payment was made in fulfilment of an earlier promise to fund her son’s business ventures – evidence overwhelmingly demonstrated that the renunciation was made in return for payment of the andpound;1 million – renunciation no effect made for consideration in monies – Appeal dismissed – section 142(3) Inheritance Tax Act 1984.

Michael Tildesley
[2009] UKVAT SPC00740
Bailii

Inheritance Tax

Leading Case

Updated: 02 November 2021; Ref: scu.373755

Revenue and Customs v Representatives of Staveley (Deceased): UTTC 10 Jan 2017

Failure to take pension benefits – Inheritance Tax

UTTC INHERITANCE TAX – whether transfer of funds to a personal pension plan was a transfer of value – Inheritance Tax Act 1984, s 3(1) and s 10 – whether deceased’s omission to take lifetime pension benefits was to be treated as a disposition and transfer of value – s 3(3) IHTA

Barling J
[2017] UKUT 4 (TCC), [2017] STC 574, [2017] BTC 504
Bailii
Inheritance Tax Act 1984 3(3)
England and Wales
Citing:
Appeal fromParry and Others v Revenue and Customs FTTTx 7-May-2014
INHERITANCE TAX – transfer of funds to personal pension plan while diagnosed with terminal cancer – whether transfer of value – omission to take lifetime benefits – whether disposition and transfer of value – appeal allowed in part . .

Cited by:
Appeal from (UTTC)Revenue and Customs v Parry and Others CA 16-Oct-2018
Pension Accumulation was taxable
The court was asked whether the pension scheme transfer by the late Mrs R F Staveley, and her omission to take income benefits which were then payable, constituted, or are to be treated as constituting, for the purposes of Inheritance Tax 1984 . .
At UTTCRevenue and Customs v Parry and Others SC 19-Aug-2020
Whether the pension scheme transfer by the late Mrs Staveley, and her omission to take income benefits which were then payable, constituted, or are to be treated as constituting, for the purposes of the Inheritance Tax 1984 a ‘disposition’ which is . .

Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 01 November 2021; Ref: scu.577810

Wright 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 might constitute a ‘benefit’ for the purposes of the 1958 Act, but it was an issue to be decided from case to case. In this case the original proposal would cross the line between variation and resettlement, and the child at three could not now be predicted to be in need of protection at the age of majority. However a variety of the proposal was acceptable and was approved.

Norris J
[2011] EWHC 2881 (Ch), 14 ITELR 603, [2012] 1 WLR 802, [2012] STC 255, [2011] STI 3431, [2012] WTLR 549
Bailii
Administration of Estates Act 1925 47, Trustee Act 1925 31 32
England and Wales
Citing:
CitedIn Re Bernstein ChD 2008
The testator had left andpound;100,000 legacies to his grandchildren at 25. In order to achieve a tax saving. The court was asked to approve an arrangement under which the individual legacies were replaced by interest in a fund in which the widow . .
CitedRe Cohen’s Will Trusts ChD 1959
An application was made for the variation of trust provisions on behalf of a child beneficiary.
Held: Where the outcome of the arrangement cannot be predicted with certainty then the Court should be prepared to take on behalf of a minor, a . .
CitedIn Re Druce’s Settlement Trusts ChD 1962
Russell J discussed the difficulties of trustees when making an application on behalf of a beneficiary of the trust: ‘The application was made not by a beneficiary but by the trustees. This is a disadvantage, particularly in a case such as the . .
CitedIn re T’s Settlement Trusts ChD 1964
Wilberforce J was asked to approve a variation of a trust in favour of a child under the 1958 Act, to restrict her from getting her full entitlement on her attaining the age of 21 because she was said to be ‘alarmingly immature and irresponsible as . .
CitedRe Van Gruisen’s Will Trusts ChD 1964
The court considered the extent of its discretion to vary the provisions of a trust.
Held: The Court should ask whether, if the persons on whose behalf consent is to be given were themselves competent and reasonable, the bargain is one that . .
CitedRe Weston’s Settlement Trusts CA 1968
The settlor applied for the approval of an arrangement for the export of his trust to Jersey, where he had gone to live. The court considered its powers under the 1968 Act.
Held: The court should not consider merely the financial benefit to . .
Citedin Re Wallace’s Settlements ChD 1968
A judge considering an application to vary trusts should approach it with ‘a fair cautious and enquiring mind’. . .
CitedIn Re Remnant ChD 1970
Approval was sought of a proposed deed varying trusts created in the will.
Held: The testator’s intention would be defeated by the proposed arrangement which involved the deletion of the forfeiture provision dependant upon the beneficiary’s . .
CitedIn Re Holt’s Settlement ChD 1969
An application was made to vary the terms of a trust in favour of children.
Held: The court was ready to receive evidence from a mother whose children were due to become entitled to funds at the age of 21 that she believed it most important . .
CitedIn Re Irving 1975
The (Canadian) court considered an application to vary a trust on behalf of a child, and asked itself: ‘Would a prudent adult, motivated by intelligent self-interest, and after sustained consideration of the proposed trusts and powers and the . .
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 . .
CitedRidgwell and others v Ridgwell and others; In Re RGST Settlement Trusts ChD 14-Nov-2007
Funds were held upon trust for X with the remainder (in default of exercise of the power of appointment) to his three children aged 7,5 and 2. It was beneficial for tax purposes to insert a life interest in favour of X’s surviving spouse (thereby . .

Lists of cited by and citing cases may be incomplete.

Wills and Probate, Inheritance Tax, Trusts

Updated: 01 November 2021; Ref: scu.448121

Scheunemann v Finanzamt Bremerhaven: ECJ 20 Mar 2012

ECJ Fundamental freedoms – Delimitation – Freedom of establishment – Article 49 TFEU – Free movement of capital – Article 63 TFEU – Inheritance tax – Acquisition by inheritance of a shareholding, forming part of the private assets of the testator, as sole shareholder in a capital company with its registered office in a third country – Provision of national law providing tax advantages for companies having their registered office or principal place of business in the national territory

A-G Trstenjak
C-31/11, [2012] EUECJ C-31/11
Bailii
Cited by:
OpinionScheunemann v Finanzamt Bremerhaven ECJ 19-Jul-2012
ECJ Freedom of establishment – Free movement of capital – Direct taxation – Inheritance tax – Conditions for the calculation of the tax – Acquisition through inheritance of a shareholding, as sole shareholder, in . .

Lists of cited by and citing cases may be incomplete.

European, Inheritance Tax, Company

Updated: 01 November 2021; Ref: scu.463192

Barclays Bank Trust Company Ltd v Revenue and Customs: CA 14 Jul 2011

Parents had each left a share of their estate to the bank on trusts for their disabled son. The revenue said that the gifts were caught by and taxable by virtue of sections 5, 49 and 89 of the 1984 Act, the residuary estates of both parents forming part of the son’s estate because section 89 required the son to be treated as if he had had an interest in possession in each of them.
Held: The detailed structure of the clauses created an interest for the son, and income accumulated could only be applied for the son and not, by virtue of the limitations and the circumstances, in favour of his children. Also, ‘the time at which the conditions for the application of section 89 must be satisfied is ‘when the property was transferred into the settlement’. At that time the trusts on which the property was held did ‘secure’ that not less than half the settled property applied during his life was applied for the benefit of Edwin. The fact that at some later time Edwin disposed of his interest so that thereafter property could not be applied for his benefit is nothing to the point.’ As such the bank’s appeal failed.

Sir Andrew Morritt Ch,
[2011] EWCA Civ 810, [2011] NPC 75, [2011] WTLR 1489, [2011] BTC 375
Bailii
Inheritance Tax Act 1984 89, Trustee Act 1925 32
England and Wales
Citing:
CitedRe Halstead’s Will Trusts ChD 1937
The term ‘benefit’ in a trust instrument is to be construed widely. To exercise a power of advancement by settling on an object of the power and his wife and children, property in which he has otherwise only a life interest was an ‘application’. . .
CitedIn Re Pilkington’s Will Trusts; Pilkington v Inland Revenue Commissioners HL 8-Oct-1962
The trustees proposed establishing a new trust in respect of the share of an estate to which an infant beneficiary had a contingent entitlement. A portion of the trust fund would be allocated to the new trust.
Held: This was a lawful exercise . .

Lists of cited by and citing cases may be incomplete.

Inheritance Tax, Trusts

Updated: 01 November 2021; Ref: scu.441817

Sussman v Revenue and Customs: FTTTx 29 Jul 2016

Whether gift with reservation

FTTTx Inheritance tax – appeal against a notice of determination – permission given to appeal out of time – appeal heard immediately after out of time application – had Deceased reduced the value of her estate some years before she died – if so was there a gift with reservation – no reduction in value of estate – gift with reservation not considered – appeal dismissed

[2016] UKFTT 523 (TC)
Bailii
England and Wales

Inheritance Tax

Updated: 01 November 2021; Ref: scu.567978

HM Revenue and Customs v Atkinson and Another: UTTC 31 Oct 2011

UTTC Inheritance Tax – Exempt transfers and relief – Agricultural property relief – Farm owned by deceased and let to family farming partnership – Deceased as partner lived in bungalow on the farm until ill-health required him to move to care home – Deceased made occasional visits to bungalow and his possessions remained in it until his death – Whether throughout the seven year period ending with his death the bungalow was occupied by the deceased or another for the purposes of agriculture – No – IHTA 1984 section 117(b). Appeal allowed

[2011] UKUT B26 (TCC)
Bailii
Inheritance Tax Act 1984 117(b)
England and Wales

Inheritance Tax

Updated: 01 November 2021; Ref: scu.449958

HM 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 estate – Deceased entering into partnership with intended successor – Whether deceased’s interest in partnership, which subsisted immediately before his death, replaced previous business carried on by deceased – Whether business excluded from business property relief as consisting mainly of making or holding investments – Inheritance Tax 1984, ss 105(1), (3), 107.

Lord Hodge, Sir Stephen Oliver QC
[2010] UKUT 300 (TCC), [2010] BTC 1656, [2010] STI 2427, [2010] WTLR 1545, [2010] STC 2666
Bailii
Inheritance Tax 1984 105(1) 105(3) 107
England and Wales
Citing:
CitedTootal Broadhurst Lee Co Ltd v Inland Revenue Commissioners HL 1949
Fees received for the use of the taxpayer’s productive plant were not income from investment.
Lord Norman defined the meaning of ‘investment’, saying: ‘The meaning of ‘investment’ is its meaning, not in the vernacular of the man in the street, . .
CitedMcCall 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. . .
CitedEdwards (Inspector of Taxes) v Bairstow HL 25-Jul-1955
The House was asked whether a particular transaction was ‘an adventure in the nature of trade’.
Held: Although the House accepted that this was ‘an inference of fact’, on the primary facts as found by the Commissioners ‘the true and only . .

Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 01 November 2021; Ref: scu.428164

Mckelvey v Revenue and Customs: SCIT 19 Jun 2008

Inter vivos gift as Provision for Care

INHERITANCE TAX – gift inter vivos – whether reasonable provision for care or maintenance of transferee – IHTA 1988 ss 3A, 11 – two houses given by terminally ill spinster to elderly widowed mother – on facts bulk of value found to be reasonable provision and exempt transfer – appeal allowed in part.

[2008] UKSPC SPC00694
Bailii
England and Wales

Inheritance Tax

Updated: 01 November 2021; Ref: scu.273104

Cairns v Revenue and Customs: FTTTx 30 Mar 2009

FTTTx (Special Commissioners) Inheritance Tax; administration and collection; executor as personal representative delivering account of heritable property of deceased; whether account incorrect; whether incorrect account fraudulently or negligently delivered; failure to declare that value of property was a provisional estimate; penalty; powers of the Tribunal; mitigation; Inheritance Tax Act 1984 sections 216, 247, 249 and 253

Gordon Reid QC
[2009] STC (SCD) 479, [2009] UKFTT 67 (TC)
Bailii
England and Wales

Inheritance Tax

Updated: 01 November 2021; Ref: scu.373583

Burden and Burden v The United Kingdom: ECHR 11 Sep 2007

The claimants were sisters who had lived together all their lives. They complained of discrimination in their treatment under the Inheritance Tax system as opposed to the treatment of a same sex couple living in a sexual relationship.

[2007] ECHR 723, 13378/05
Bailii
European Convention on Human Rights
Human Rights
Citing:
See AlsoBurden and Burden v The United Kingdom ECHR 12-Dec-2006
Sisters,Together always not Discriminated Against
(Grand Chamber) The claimants were sisters who had lived together all their lives and owned property jointly. They complained that the Inheritance Tax regime treated them worse than it would a married couple, and was discriminatory.
Held: . .

Cited by:
See AlsoBurden and Burden v The United Kingdom ECHR 29-Apr-2008
(Grand Chamber) The claimants were sisters who had lived together all their lives. They complained of discrimination in their treatment under the Inheritance Tax system as opposed to the treatment of a same sex couple living in a sexual . .
CitedAL (Serbia) v Secretary of State for the Home Department; Rudi v Same HL 25-Jun-2008
Each claimant had arrived here with their parents, and stayed for several years. They were excluded from the scheme allowing families who had been here more than three years to stay here, because they had attained 18 and were no longer dependant on . .

Lists of cited by and citing cases may be incomplete.

Human Rights, Discrimination, Inheritance Tax

Updated: 01 November 2021; Ref: scu.270744

Pitt 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 sought the unravelling of the trust based on either Hastings Bass or mistake.
Held: The rule in Hastings-Bass could be used by others than only trustees. Robert Englehart QC said: ‘A mere failure by someone to take a material consideration into account in the conduct of his own affairs will not justify setting aside for mistake. It was said in argument before me that the law allows you to be as foolish as you like with your own property. On the other hand, there certainly is jurisdiction, irrespective of any trust or fiduciary element, to set aside a voluntary transaction where there has been an operative mistake. Nevertheless, for the rule in Hastings-Bass to apply there is no need to identify a mistake as such, as opposed to a failure to take a relevant consideration into account.’ though there was no real mistake, only a failure to address the effect of the arrangement fully, the rule in Hastings-Bass could be applied and the trust varied.

Robert Englehart, QC
[2010] EWHC 236 (Ch)
Bailii, Times
Mental Health Act 1983
England and Wales
Citing:
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 . .
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 . .
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 . .
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 . .
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 . .
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 . .
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 . .
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 . .
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 . .
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 . .
CitedWolff v Wolff ChD 6-Sep-2004
The court considered its ability to redraw a document where its legal effect was misunderstood. . .
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 . .
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 . .
CitedBurrell and Sharman v Burrell, Shore, Tyrrell, etc ChD 23-Feb-2005
burrell_burrellChD05
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 . .

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 . .

Lists of cited by and citing cases may be incomplete.

Trusts, Wills and Probate, Inheritance Tax

Leading Case

Updated: 01 November 2021; Ref: scu.396742

Revenue and Customs v Parry and Others: CA 16 Oct 2018

Pension Accumulation was taxable

The court was asked whether the pension scheme transfer by the late Mrs R F Staveley, and her omission to take income benefits which were then payable, constituted, or are to be treated as constituting, for the purposes of Inheritance Tax 1984 (‘IHTA’) a ‘disposition’ which is a ‘transfer of value’ in favour of her sons, who were to be the beneficiaries of the death benefit. The relevant statutory provisions are section 3(1) IHTA, read with section 10(1), and section 3(3) IHTA. At the time of the transfer, Mrs Staveley was in the late stages of a terminal illness, from which she died six weeks later. The right to receive the death benefit has been assessed as at the date of the transfer as worth a considerable proportion of Mrs Staveley’s pension funds.
Held: It did. The failure to take pension benefits in due course increased the estates of the sons.

Lady Arden JSC, Newey LJ, Birss J
[2018] EWCA Civ 2266, [2018] WLR(D) 638, [2019] WTLR 45, [2018] STC 2324, [2019] 1 WLR 2397, [2019] 2 All ER 288
Bailii, WLRD
England and Wales
Citing:
At FTTTxParry and Others v Revenue and Customs FTTTx 7-May-2014
INHERITANCE TAX – transfer of funds to personal pension plan while diagnosed with terminal cancer – whether transfer of value – omission to take lifetime benefits – whether disposition and transfer of value – appeal allowed in part . .
Appeal from (UTTC)Revenue and Customs v Representatives of Staveley (Deceased) UTTC 10-Jan-2017
Failure to take pension benefits – Inheritance Tax
UTTC INHERITANCE TAX – whether transfer of funds to a personal pension plan was a transfer of value – Inheritance Tax Act 1984, s 3(1) and s 10 – whether deceased’s omission to take lifetime pension benefits was . .

Cited by:
Appeal from (CA)Revenue and Customs v Parry and Others SC 19-Aug-2020
Whether the pension scheme transfer by the late Mrs Staveley, and her omission to take income benefits which were then payable, constituted, or are to be treated as constituting, for the purposes of the Inheritance Tax 1984 a ‘disposition’ which is . .

Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 01 November 2021; Ref: scu.625964

Davies and Another v Revenue and Customs: FTTTx 9 Jun 2009

FTTTx Inheritance tax – death – estate passing on death – was there settled property derived from deceased’s husband who died in 1969 and estate duty was paid – questions of secret trust and mutual wills – transitional relief from inheritance tax – Inheritance Tax Act 1984 Schedule 6, paragraph 2

Powell J
[2009] UKFTT 138 (TC), [2009] STI 2095, [2009] WTLR 1151
Bailii
Inheritance Tax Act 1984 Schedule 6, paragraph 2
England and Wales

Inheritance Tax

Updated: 01 November 2021; Ref: scu.373676

Burden and Burden v The United Kingdom: ECHR 29 Apr 2008

(Grand Chamber) The claimants were sisters who had lived together all their lives. They complained of discrimination in their treatment under the Inheritance Tax system as opposed to the treatment of a same sex couple living in a sexual relationship.
Held: (majority) They were not in an analogous situation to civil partners because marriage and civil partnership were different forms of relationship from siblingship.
Judge Bjorgvinsson said that the comparison should focus, not on the differences in legal framework, but on the differences in the nature of the relationship as such.
‘The Court recalls that, in order to be able to lodge a petition in pursuance of Art. 34, a person, non-governmental association or group of individuals must be able to claim ‘to be the victim of a violation . . of the rights set forth in the Convention.’ In order to claim to be a victim of a violation, a person must be directly affected by the impugned measure … It is, however, open to a person to contend that a law violates his rights, in the absence of an individual measure of implementation, if he is required either to modify his conduct or risk being prosecuted or if he is a member of a class of people who risk being directly affected by the legislation. Thus in (Marckz v Belgium) 1979-80 2 EHRR 330 the applicants, a single mother and her five-year-old ‘illegitimate’ daughter, were found to be directly affected by, and thus victims of, legislation which would, inter alia limit the child’s right to inherit property from her mother upon the mother’s eventual death, since the law automatically applied to all children born out of wedlock.’

Bjorgvinsson J
13378/05, [2008] ECHR 357, Times 07-May-2008, [2008] 18 EG 126, (2008) 47 EHRR 38, [2008] WTLR 1129, [2008] 2 FCR 244, 10 ITL Rep 772, [2008] STC 1305, 24 BHRC 709, [2008] 18 EG 126, [2008] 2 FLR 787, [2008] BTC 8099, [2008] Fam Law 628,
Bailii, Bailii
European Convention on Human Rights
Citing:
See AlsoBurden and Burden v The United Kingdom ECHR 11-Sep-2007
The claimants were sisters who had lived together all their lives. They complained of discrimination in their treatment under the Inheritance Tax system as opposed to the treatment of a same sex couple living in a sexual relationship. . .
See AlsoBurden and Burden v The United Kingdom ECHR 12-Dec-2006
Sisters,Together always not Discriminated Against
(Grand Chamber) The claimants were sisters who had lived together all their lives and owned property jointly. They complained that the Inheritance Tax regime treated them worse than it would a married couple, and was discriminatory.
Held: . .
CitedBurden and Burden v The United Kingdom ECHR 29-Apr-2008
(Grand Chamber) The claimants were sisters who had lived together all their lives. They complained of discrimination in their treatment under the Inheritance Tax system as opposed to the treatment of a same sex couple living in a sexual . .

Cited by:
CitedBurden and Burden v The United Kingdom ECHR 29-Apr-2008
(Grand Chamber) The claimants were sisters who had lived together all their lives. They complained of discrimination in their treatment under the Inheritance Tax system as opposed to the treatment of a same sex couple living in a sexual . .
CitedRodriguez v Minister of Housing of The Government and Another PC 14-Dec-2009
Gibraltar – The claimant challenged a public housing allocation policy which gave preference to married couples and parents of children, excluding same sex and infertile couples.
Held: The aim of discouraging homosexual relationships is . .
CitedAxa General Insurance Ltd and Others v Lord Advocate and Others SCS 8-Jan-2010
axaReSCS201
The claimant sought to challenge the validity of the 2009 Act by judicial review. The Act would make their insured and themselves liable to very substantial unanticipated claims for damages for pleural plaques which would not previousl or otherwise . .
CitedAXA General Insurance Ltd and Others v Lord Advocate and Others SC 12-Oct-2011
Standing to Claim under A1P1 ECHR
The appellants had written employers’ liability insurance policies. They appealed against rejection of their challenge to the 2009 Act which provided that asymptomatic pleural plaques, pleural thickening and asbestosis should constitute actionable . .
CitedRecovery of Medical Costs for Asbestos Diseases (Wales) Bill (Reference By The Counsel General for Wales) SC 9-Feb-2015
The court was asked whether the Bill was within the competence of the Welsh Assembly. The Bill purported to impose NHS charges on those from whom asbestos related damages were recovered.
Held: The Bill fell outside the legislative competence . .

Lists of cited by and citing cases may be incomplete.

Human Rights, Inheritance Tax, Discrimination

Leading Case

Updated: 31 October 2021; Ref: scu.270743

Watkins and Another v Revenue and Customs: FTTTx 17 Nov 2011

FTTTx Inheritance tax – discounted gift trust – valuation of retained interest to income stream – s160 IHTA 1984 – burden of proof – adequacy of comparables – appeal dismissed

Malachy Cornwell-Kelly J
[2011] UKFTT 745 (TC)
Bailii
Inheritance Tax Act 1984 160
England and Wales
Citing:
CitedSalvesen’s Trustees v Inland Revenue Commissioners SCS 1930
The court considered the valuation of shares in a notional purchase. The company’s articles of association contained a provision that the company might at any time, by extraordinary resolution, resolve that any shareholder, other than a director or . .

Lists of cited by and citing cases may be incomplete.

Inheritance Tax

Updated: 31 October 2021; Ref: scu.449684

Silber v Revenue and Customs: FTTTx 14 Nov 2012

FTTTx INHERITANCE TAX – whether amount paid by the deceased to a company owned by him was a loan or a gift – found on the evidence a loan – whether a payment made by legatees under a will to a third party in settlement of litigation concerning the validity of the will was in discharge of a liability of the deceased which was deductible in computing his estate for IHT purposes – held it was not – whether further charitable payments made by a legatee and personal representative of the deceased attracted an exemption from IHT in the computation of the IHT due on the death of the deceased – held no – appeal dismissed
[2012] UKFTT 700 (TC)
Bailii
England and Wales

Updated: 27 October 2021; Ref: scu.466258

Chadda and Others v Revenue and Customs: FTTTx 27 Nov 2014

FTTTx INHERITANCE TAX – nil rate band trust – whether joint tenancy of property severed – absence of signed Notice of Severance – draft Notice produced – whether evidence sufficient to show that original Notice served – weight of draft in context of other evidence – held, on totality of evidence, that written notice given – consideration of other methods of severance – held that evidence would have sufficed to show severance by other methods – appeals against determinations allowed
[2014] UKFTT 1061 (TC)
Bailii
England and Wales

Updated: 12 October 2021; Ref: scu.540286

Vincent v Revenue and Customs (Inheritance Tax – Whether The Drafting In A Will Created An Interest In Possession): FTTTx 30 Oct 2019

INHERITANCE TAX – whether the drafting in a will created an interest in possession – yes – was the interest disclaimed – no
[2019] UKFTT 657 (TC)
Bailii
Administration of Justice Act 1982 21, Inheritance Tax Act 1984 43
England and Wales

Updated: 27 September 2021; Ref: scu.644055