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

UT (Tax & Chancery) Case Number: UT/2023/000079
UT/2023/000109

INHERITANCE TAX – sale of home by deceased to trustees of a trust in which she held an interest in possession, consideration for which was a promissory note – trustees resolved to allow deceased to continue to reside in home – gift of note by deceased to a second trust under which she was precluded from benefitting – deceased died more than seven years after this gift – FTT dismissed appeal holding that in valuing the estate the liability under the note should be abated to nil under s103 FA 1986 – Appellants appealed against that conclusion and HMRC cross-appealed on five issues – held – Note issued by the trustees was not a debt incurred by the deceased – appeal allowed, cross-appeal dismissed – decision of the FTT set aside – decision re-made – appeal allowed

Hearing venue: The Rolls Building

London

EC4A 1NL

Written submissions: 22 November 2024

Judgment date: 17 February 2025

Before

JUDGE JEANETTE ZAMAN

JUDGE VIMAL TILAKAPALA

Between

(1) THE EXECUTORS OF MRS LESLIE VIVIENNE ELBORNE DECEASED
(2) THE TRUSTEE OF THE ELBORNE LIFE SETTLEMENT
(3) THE TRUSTEES OF THE ELBORNE FAMILY SETTLEMENT

Appellants/Cross-Respondents

and

THE COMMISSIONERS FOR HIS MAJESTY’S

REVENUE AND CUSTOMS

Respondents/Cross-Appellants

Representation:

For the Appellants: Charles Bradley, counsel, instructed by Buckles Solicitors LLP

For the Respondents: Jonathan Davey KC and Barbara Belgrano, counsel, instructed by the General Counsel and Solicitor for His Majesty’s Revenue and Customs

DECISION