Hall & anr v HMRC [2023] WTLR 529

WTLR Issue: Summer 2023 #191

1. NICHOLAS JOHN HALL

2. CHRISTOPHER VALENTINE LOPEZ (as trustees of the Carolina Raboni estate)

V

THE COMMISSIONERS FOR HER MAJESTY’S REVENUE AND CUSTOMS

Analysis

Mrs Raboni, a widow, owned a freehold house in which she resided. As her health worsened, a friend, Mr Boggia, helped her and began to spend nights at the property. On 2 October 2004, Mrs Raboni passed away. Her will provided that her five nieces and nephews were the beneficiaries of her estate and that Mr Boggia was permitted to reside in the property during his lifetime without charge. It was not disputed that Mr Boggia resided in the property after Mrs Raboni’s death. The residuary beneficiaries were advised that there were insufficient funds in the estate to pay IHT unless the property was sold and that the property would need to be sold with Mr Boggia in possession. The residuary beneficiaries resolved to retain the property and pay the IHT from their own funds. On 16 March 2017, Mr Boggia passed away, the property was sold and the trustees of Mrs Raboni’s estate paid IHT on the basis that Mr Boggia had held an interest in possession of the property. Later, a refund of such IHT was requested on the basis that Mr Boggia did not have an interest in possession of the property.

Held:

  1. (1) The position needed to be considered on hypotheticals because the practical route taken by the residuary beneficiaries did not in and of itself confer rights not given under Mrs Raboni’s will. The court would consider what route the executors could have been compelled to take.
  2. (2) The only route that the executors could have been compelled to take was to sell the property, given the IHT liability. It was common ground that, if the property had been sold to pay the IHT, Mr Boggia would not have had an interest in the property. Mr Boggia could not enforce a right to live in the property. Accordingly, Mr Boggia did not have an interest in possession in the property.
JUDGMENT SARAH ALLATT (TRIBUNAL JUDGE): Introduction [1] With the consent of the parties, the form of the hearing was V (video), with all parties attending remotely on the Tribunal Video Hearing System. A face to face hearing was not held because at the time of the listing, work from home guidance was in existence. The …
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Counsel Details

Kate Selway KC (Radcliffe Chambers, 11 New Square, Lincoln’s Inn, London WC2A 3QB, tel 020 7831 0081, e-mail clerks@radcliffechambers.com) for the appellants.

Dr Jeremy Schryber (HM Revenue and Customs Solicitor’s Office, 14 Westfield Avenue, Stratford, London E20 1HZ) for the respondent.

Cases Referenced

  • Commissioner of Stamp Duties v Livingstone [1965] AC 694
  • Inland Revenue Commissioners v Lloyds Private Banking Ltd [1998] STC 559
  • Judge (Walden’s Personal Representative) v HMRC [2005] STC 863; [2005] WTLR 1311 SpC
  • Pearson v IRC [1981] AC 753

Legislation Referenced

  • Administration of Estates Act 1925, s25 and 34, Sch 1
  • Trusts of Land and Appointment of Trustees Act 1996, s6