1. PARVEEN CHADDA
2. EILEEN NASH
3. PAULINE MORONEYV
THE COMMISSIONERS FOR HER MAJESTY'S REVENUE & CUSTOMS
Kingston Smith were engaged to provide inheritance tax planning advice to Mr and Mrs Robin, who had terminal medical conditions, in early 2003. They wished to ensure that as much of their property should be available to support the survivor and, following the death of the survivor, their disabled daughter. Mr Chadda, who was a partner at Kingston Smith, discussed strategy at a meeting with Mr and Mrs Tobin based on utilising their inheritance tax nil rate bands, which would require them to make new wills and (in case of a beneficial joint tenancy) service of a notice of severance in relation to Park House Farm (Park House). Mr Chadda attended when Mr and Mrs Tobin signed their wills at Park House on 30 July 2003. A notice of severance was not signed at that time because they were still waiting to hear from the bank (which held the title deeds) as to how Park House was held; when it became apparent in early August 2003 that it was held as a beneficial joint tenancy, a notice of severance was prepared and Mr Chadda went again to Park House and a document was signed by Mr and Mrs Tobin. On 29 September 2003 Mr Tobin died and a trust of £255,000 (which was the upper limit of the nil rate band) came into effect; it was then agreed to transfer the trust’s share of Park House into the sole name of Mrs Tobin subject to her estate being indebted to the trust. Mrs Tobin died on 28 July 2007 and her estate repaid the loan, which was applied together with other funds towards the purchase of a new property for her disabled daughter. When, however, Kingston Smith claimed a deduction against the value of the estate by reference to the debt of £255,000, HMRC requested evidence that Park House was not held as a joint tenancy, rather as a tenancy in common, since property passing by survivorship could not be treated as a trust asset under the Will. Kingston Smith asserted that the notice of severance had been signed but its whereabouts were unknown. HMRC did not consider that the burden of proof as to severance of the joint tenancy had been satisfied and, on 8 August 2012, issued notices of determination that the full value of Park House was to be taken into account in ascertaining the value of Mrs Tobin’s estate for the purpose of inheritance tax. On 9 January 2013 the notices of determination were upheld on review. On 5 February 2013 the executors appealed.
Harriet Brown of Counsel (Tax Chambers, 15 Old Square, Lincolns Inn, London WC2A 3UE, tel 020 7242 2744, e-mail firstname.lastname@example.org) instructed by Kingston Smith LLP, Chartered Accountants (Kingston Smtih W1, 141 Wardour Street, London W1F 0UT, tel 020 7566 4000, e-mail email@example.com) for the appellant.
Colin Ryder, senior officer of HM Revenue and Customs, for the respondents.