Kersner v HMRC [2019] UKFTT 221 (TC)

Wills & Trusts Law Reports | Autumn 2019 #176

On an appeal against HMRC’s determination of liability to inheritance tax the appellant made a number of applications in the First-Tier Tribunal (Tax Chamber), including an application to opt out of the complex track costs regime, and for disclosure of documents alleged to be relevant to the HMRC’s assessment that the appellant had not been domiciled in the UK, but in Israel, when shares had been transferred to her by her husband. The appellant contended that she was UK domiciled at the time of the gift and that the spousal exemption applied.

The tribunal wrote to the...

LCN v KF [2019] EWCOP 1

Wills & Trusts Law Reports | Summer 2019 #175

CJF was a thirteen year old boy who suffered very serious neurological damage at birth. He was initially cared for by his mother, KJF, but she had also suffered complications as a result of CJF’s birth, so he ended up being cared for by a foster parent, LR under a Special Guardianship order. LR passed away in 2013, and the Special Guardianship order was transferred to LR’s daughter, EH, and her husband, AH. CJF’s father, BJF, had denied his paternity, was not named on his birth certificate, and had played no role in CJF’s life.

Before she died, LR brought a claim against the NHS T...

HMRC v Parry [2018] EWCA Civ 2266

Wills & Trusts Law Reports | Spring 2019 #174

Shortly before her death the director of a company (S) transferred the funds from a company pension policy acquired by her on her divorce from her ex-husband and known as a s32 buyout policy (the s32 policy) to a personal pension policy (PPP) issued by AXA. At the same time S nominated her two sons as her beneficiaries in relation to the death benefit payable under the PPP. If the s32 pension had remained in the company scheme, on her death a sum would have been payable to S’s estate which would have been chargeable to IHT. S’s sons were the residua...

Bathurst v Chantler [2018] EWHC 21 (Ch) 

Wills & Trusts Law Reports | Winter 2018 #170

The claimant was the second wife and widow of the Earl Bathurst (Eighth Earl). The first to third defendants were the trustees of the Earl’s Fund (EFT) created under a statutory Codicil made on behalf of the Eighth Earl by the Court of Protection. The fourth to seventh defendants were the trustees of the Earl Bathurst 1963 estate settlement (settlement). When the Earl succeeded to his title in 1943, his inheritance included a large estate comprising 15,000 acres and a mansion house known as Cirencester Park. There were also chattels that included valuable works of art and collections of ...

HMRC v Parry [2017] UKUT 4 (TCC)

Wills & Trusts Law Reports | Winter 2018 #170

Mrs Staveley established a company known as Morayford with her husband Mr Staveley. She was director of the company, and had a large pension fund with its occupational pension scheme. She divorced from her husband in 2000. Indeed the terms of the divorce, her share of the pension scheme was to be transferred to her. In July 2000, and upon advice, she transferred her fund from the Morayford scheme to a s32 scheme.

In 2004, she was diagnosed in December 2004 with cancer. In 2006, by which time her prognosis was poor, she was advised to transfer her pension fund into a perso...

RBC v Stubbs [2017] EWHC 180 (Ch)

Wills & Trusts Law Reports | Winter 2018 #170

The claim was brought to rectify two deeds of revocation and appointment made in 2008 and 2014, or alternatively to rescind them on the grounds of mistake.

Each of the settlor’s adult children had an interest in possession in a one sixth share of the trust fund. In 2004, in order to ensure that no inheritance tax was payable upon their one sixth share of the trust fund as a result of their deaths, the trustees appointed successive life interests for the spouses of two of these children, Michael and Joanna. Unfortunately, both Michael and Joanna’s marriages ended in divorce. The tr...

Ross v HMRC [2017] UKFTT 507 (TC)

Wills & Trusts Law Reports | Winter 2018 #170

Mrs Ross originally owned a hotel called the Port Gaverne Inn in Cornwall and later acquired eight holiday cottages across the road called the Green Door Cottages. When she was no longer fit enough to run the business, the hotel was sold though its new owner agreed to provide services to guests renting out the cottages. A handyman was employed by the partnership which owned the cottages and other properties. When Mrs Ross died on 7 November 2011, she was entitled to a two-thirds share in the partnership and the total value of all the properties held by it amounted to £1.5m. The appellant...

Harris v HMRC [2018] UKFTT 204 (TC)

Wills & Trusts Law Reports | Spring 2018 #171

HMRC successfully applied to strike out Mr Harris’ appeal against an inheritance tax determination, under Rule 8 of the Tribunal Procedure (First-Tier Tribunal) (Tax Chamber) Rules 2009.
 Mr Hughes was appointed as Administrator of the deceased’s estate in June 2013. HMRC opened an enquiry into the IHT400 he filed, and determined that the IHT payable was £341,278.76. Mr Harris requested a statutory review of this determination; this upheld the determination. Mr Harris appealed against the findings of this review, though he did not challenge the quantum of the determination.

The b...

Palliser v HMRC [2018] UKUT 71 (LC)

Wills & Trusts Law Reports | Spring 2018 #171

The appellant, Mr Palliser, disputed the valuation, for inheritance tax purposes, of a property in which his father’s estate owned an 88.4% share in the long leasehold and a third of the freehold title of the building it which it is located. HMRC had determined that the market value of the estate’s share at the date of the deceased’s death was £1,829,880. This determination was subsequently upheld; Mr Palliser appealed against those decisions, and submitted that the correct valuation should be £1,113,840.

The principal matter in issue was the correct interpretation of s.160 of...

Inheritance tax: The net widens

Mary Ashley discusses the pros and cons of the new inheritance tax hallmark ‘While the introduction of a narrower hallmark than the Draft Regulations suggested is a welcome development, it is still very wide.‘ For a few years now, the government has been seeking to widen the Disclosure of Tax Avoidance Schemes (DOTAS) hallmark for …
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