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

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


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


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


House of Lords, Bailii


Finance Act 1986 102


England and Wales


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

Cited by:

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

Inheritance Tax, Landlord and Tenant

Updated: 31 May 2022; Ref: scu.158978