STEP UK News Digest 31 January 2013

INHERITANCE TAX – No need to report property sales at higher than probate value

HMRC has revised its inheritance tax manual to make clear that it will not accept any claims for a higher sale value for land or buildings sold within three years of the date of death.


TRUSTS – Danger for existing vulnerable beneficiary trusts

The new qualifying conditions for bereaved minors’ trusts, set out in the Finance Bill, contain a worrying restriction that may force practitioners to amend all existing wills and trust deeds. Attempts are under way to get the provision altered in time.
Boodle Hatfield
Law Society (response to HMRC consultation, PDF file)

INHERITANCE TAX – Avoiding charges by assigning life policy to multiple trusts

Can a testator write an existing GPB1 million life insurance policy into four distinct discretionary trusts so that each trust has its own nil-rate band, and thus the ten-year anniversary and exit charges work out at zero? Or will HMRC claim ‘associated operations’ as in the Rysaffe case?
Trusts Discussion Forum

INHERITANCE TAX – HMRC changes rules on situs of specialist debts

HMRC has unilaterally declared that a specialty debt (usually a debt recorded in a deed) is situated in the jurisdiction where the debtor resides, rather than the jurisdiction of the deed itself as was the established view. The decision, taken without consultation, is of particular importance for inheritance tax for resident non-domiciles, especially if HMRC tries to impose it retrospectively. 


CONTENTIOUS PROBATE – Son challenges codicil in cohabitant’s favour

The Telegraph reports a case currently being heard at the England and Wales High Court, in which a man is contesting a deathbed codicil made by his late father in favour of a cohabitant. Gary Stolkin claims the codicil, which gifts Leslie Greaves a large legacy and life interest in the family home, is invalid on grounds of mental capacity and lack of knowledge and consent.

ENFORCEMENT – Re-examination of HMRC’s “abuse of process” in Montpelier case

The First-tier Tax Tribunal has been ordered to reconsider a case in which HMRC was accused of abuse of process, having arrested Brian and Doreen Foulser’s tax advisor while their case was being heard. Watkin Gittins of Isle of Man-based Montpelier had advised them on a capital gains tax relief scheme. The charges against him were later dropped and the police have since paid Montpelier damages for illegally raiding its premises.
Financial Director
Upper Tax Tribunal (PDF file)

TRUSTS OF LAND – Cohabitee joint ownership proceedings may be granted anonymity

The England and Wales High Court has granted an anonymisation order in a TOLATA property dispute between an unmarried couple, although Mr Justice Mostyn accepted that the secrecy provisions of the Matrimonial Causes Act 1973 do not apply.
Family Law Week
Family Law Week (Judgement)


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