Upper Tribunal Tax and Chancery Chamber

UT (Tax & Chancery) UT/2023/000079 UT/2023/000109 - [2025] UKUT 00059 (TCC)

Fecha: 20-Nov-2024

Grounds of appeal and cross-appeal

Grounds of appeal and cross-appeal

11.

The Appellants submit that the FTT erred in law in its conclusions on the Section 103 Debt Incurred Issue.

12.

The FTT decided the remaining (ten) issues in the Appellants’ favour, and HMRC cross-appealed on five of those issues:

(1)

the “Section 102 Property Issue” – HMRC submit that s102 FA 1986 (“s102”) applies in respect of the transfer by Mrs Elborne of her interest in the Property with the effect that such interest falls to be treated as property to which Mrs Elborne was beneficially entitled immediately before her death and forms part of the value transferred by way of the deemed transfer of value immediately before her death;

(2)

the “Section 102A Issue” – HMRC submit that section 102A FA 1986 (“s102A”) applies in respect of the transfer by Mrs Elborne of her interest in the Property with the effect that such interest falls to be treated as property to which Mrs Elborne was beneficially entitled immediately before her death and forms part of the value transferred by way of the deemed transfer of value immediately before her death;

(3)

the “Election Issue” – HMRC submit that by virtue of making the Election Mrs Elborne brought herself within the ambit of s102 such that her interest in the Property falls to be treated as property to which Mrs Elborne was beneficially entitled immediately before her death and forms part of the value transferred by way of the deemed transfer of value immediately before her death;

(4)

the “Section 49/Rossendale Issue” – HMRC submit, in part based on Rossendale Borough Council v Hurstwood Properties (A) Ltd [2021] UKSC 16 (“Rossendale”), that the liability to which the Note gave rise is not one which falls to be taken into account by way of a deduction for the purposes of s49 IHTA 1984 (“s49”) having been manufactured solely for the purpose of diminishing the value of the property in which Mrs Elborne’s interest in possession subsisted; and

(5)

the “Section 102 Note Issue” – HMRC submit that s102 applies in respect of the transfer by Mrs Elborne of her interest in the Note with the effect that such interest falls to be treated as property to which Mrs Elborne was beneficially entitled immediately before her death and forms part of the value transferred by way of the deemed transfer of value immediately before her death.