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

HMRC submit that the FTT erred in concluding that the liability under the Note should be taken into account by way of deduction for the purposes of s49. This is a logically prior argument to the Section 103 Debt Incurred Issue (and indeed to all of the issues based on s102 and s103). HMRC’s position is that the liability was manufactured solely for the purpose of diminishing the value of the property in which Mrs Elborne’s interest in possession subsisted and that, construing the legislation purposively and viewing the facts realistically, Parliament cannot be expected to have intended to exempt from the charge to inheritance tax a transaction which had no aim other than avoiding that charge to tax.