Topic: Inheritance Tax

Hatton v HMRC [2010] UKUT 195 (LC)

The appellant appealed against a determination by HMRC under s221 of the Inheritance Tax Act 1984 that the value of a freehold interest held by the deceased in a property was £475,000 on the date of death. The appellant (the executor of the deceased’s will) contended that the value was £400,000. The appellant relied on the principal of an estate agents and valuer who based his valuation on his local knowledge of property in the area, his 25 years’ experience and two comparables. HMRC relied upon the evidence of a senior valuer attached to the Valuation Offic...

Salinger & anr v HMRC [2016] UKFTT 677 (TC)

Donald Paiba Salinger (deceased), who was domiciled in the UK, sought to reduce the inheritance tax burden which would arise on his death by acquiring a reversionary interest in an offshore trust on the basis that it would qualify as excluded property (s48(1) of the Inheritance Tax Act 1984) and then transfer that reversionary interest to the trustees of the Donald Salinger Family Trust (DSFT) on the basis that no loss to the estate would be caused and thus not constitute a transfer of value. These transactions took place before legislation designed to block similar tax...

Routier & anr v HMRC [2014] EWHC 3010 (Ch)

This appeal concerned whether a disposition in the will of the late Mrs Beryl Coulter (the deceased) is exempt from inheritance tax because it comprises property which is given to charities within the meaning of s23 of the Inheritance Tax Act 1984 (the IHTA). The appellants are the executors of the deceased’s estate.

The deceased died on 9 October 2007. In her will dated 1 October 2007 she left a number of pecuniary legacies. Her residuary estate was held on trust by the executors (the Coulter Trust) for ‘such incorporated body as may be set ...

Sussman v HMRC [2016] UKFTT 523 (TC)

The appellant was the personal representative and trustee of the estate of Mrs Sussman (the deceased) who died in 2006. The appeal concerned whether a residential property (the property) was part of the deceased’s estate, and the treatment of the property for IHT purposes. The appeal also concerned appeals out of time, as the appellant’s application to bring an appeal out of time was heard as a preliminary matter immediately before the substantive appeal.

The property had belonged to the deceased’s late husband. The deceased received an interest in possession in ...

Herring v Shorts

The deceased (J) died on 2 June 2012, a widow with no children or close relatives. On 8 November 2011 J executed a will (the will) drafted by a solicitor (W). She made a number of pecuniary legacies including legacies of £54,000 each in favour of the claimants.

An employee of the defendant, (S), had been J’s financial advisor since 2000. In 2011, prior to executing the will and acting on S’ advice, J formed two trusts in the claimants’ favour to mitigate inheritance tax payable on her death. One was a discretionary trust naming the claimants sole discretionary b...

Edwards-Moss & anr v HMRC [2016] UKFTT 147 (TC)

This appeal concerned the estate of Lady Edwards-Moss (the deceased) who died on 8 February 2007. The executors of her estate appealed against a determination under s221 IHTA 1984. HMRC argued that the liability arose on two alternative bases. First, the transfer of a freehold farm in return for an annuity on 23 January 2007 (very shortly before her death) was ineffective (either on the basis that it was legally ineffective or under the reservation of benefit rules). Alternatively, this was a transfer at an undervalue, and therefore a transfer of value on which an IHT liability ...

Van der Merwe v Goldman & anr [2016] EWHC 790 (Ch)

The claimant and first defendant were husband and wife and joint freehold owners of a property in the UK where they lived. Up until March 2006 the claimant and first defendant were treated as domiciled in South Africa. However, from 6 April 2006 they would be treated as domiciled in the UK for inheritance tax purposes. In November 2005 the claimant took advice on mitigating the consequences of being treated as domiciled in the UK for the purposes of inheritance tax. He was advised that his position would be improved if he placed the property into an interest in possession settlement.

Hood [2016] UKFTT 059 (TC)

Lady Hood was the lessee of the property in Chelsea (‘the property’) pursuant to a lease (‘the head lease’) dated 21 September 1979 and made between (1) Viscount Chelsea (‘the head lessor’) (2) the Chelsea Land & Investment Company Limited (‘Chelsea land”); (3) Cadogan Holdings Company (‘Cadogan’) and (4) Lady Hood. The head lease contained a covenant by the lessee not to transfer underlet or part with possession of part of the demised premises without consent of Cadogan. The head lease also contained a right for the head lessor or the Company to forfeit the head lease for breaches o...

Barclays Wealth Trustees (Jersey) Ltd & anr v HMRC [2015] EWHC 2878 (Ch)

On 21 June 2001 the settlor, who was then non-domiciled in the UK, settled cash derived from a Jersey bank account on the trusts of a Jersey-resident discretionary trust called the Michael Dreelan Trust (MDT). The settlor became deemed domiciled in the UK for inheritance tax purposes from the beginning of the tax year 2003/04. Subsequently, on 4 April 2008, the settlor and others set up another settlement called the Dreelan Brothers Joint Trust (DBJT) and 25,000 ordinary shares in Qserv Limited were transferred from the MDT. These were later sold for cash that was UK situs property. On 2...