A family has won a long-running dispute with HMRC after the Court of Appeal ruled decisively in their favour over an inheritance tax planning arrangement put in place by their late mother, in a case fought all the way from the First Tier Tribunal by the Will, Trusts & Estate Disputes team, here at Buckles Law.
The case centred on a Home Loan Scheme, sometimes called a Double Trust Scheme, set up by the late Mrs Elborne in 2003. Under the arrangement, Mrs Elborne sold her home into a trust in exchange for a promissory note of equal value, then gifted that note to a second trust for the benefit of her three children. She continued to live in the property until her death in 2011, and the arrangement was intended to reduce the inheritance tax due on her estate.
HMRC challenged the scheme, arguing that it should not work as intended and that the full value of the property should count towards the estate regardless of the promissory note. What followed was several years of argument through the Tax Chamber of the First Tier Tribunal and the Upper Tribunal, with different findings at each stage, before the case finally reached the Court of Appeal.
The Court has now ruled fully in the family’s favour, finding that the arrangement was valid and that HMRC’s case for disregarding it did not hold up, describing one of its arguments as “clearly untenable”. It is the first time the Court of Appeal has considered a scheme of this kind, and the ruling brings welcome certainty for anyone with a similar arrangement in place.
Buckles’ team, led by Nick Porter, Head of the Will, Trusts & Estate Disputes team, has acted for the family since the case began at the First Tier Tribunal, instructing Charles Bradley of Pump Court Tax Chambers throughout.
It is the kind of case that rewards patience and a genuine command of the detail: a dispute that ran for years, moved through three different courts, and turned on arguments that needed to be made and remade as HMRC’s position shifted at each stage.
Nick Porter commented: “Cases like this take real commitment from a client and from the team representing them. We believed in the strength of this arrangement from the outset, and it’s a great result for the family to see that belief vindicated at the highest level.
“Many thousands of families put similar schemes in place in the late 1990s and early 2000s, so this judgment carries weight well beyond this one case.”
If you have questions about a Home Loan Scheme or similar inheritance tax arrangement, whether you are the person who set it up or an executor administering an estate that includes one, our Will, Trusts & Estate Disputes team can advise on where you stand. Contact Nick Porter to discuss your circumstances via email or telephone now.
