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Court of Appeal makes important ruling on inheritance tax gift with reservation provisions

Published: Friday 2 November 2018

The Estate of Lady Hood v Commissioners for HM Revenue and Customs [2018] EWCA Civ 2405

Jonathan Davey QC has acted successfully for the Respondents in an important inheritance tax dispute before the Court of Appeal. The case concerned the late Lady Hood’s grant of a long lease in respect of residential property in Chelsea. The question in issue was whether in granting the lease, Lady Hood had reserved a benefit within the meaning of the relevant IHT legislation thereby giving rise to a tax liability for her Estate. The Court of Appeal (Patten LJ, Henderson LJ, Sir Colin Rimer) upheld the decision of the Upper Tribunal (Mrs Justice Rose and Judge Bishopp) [2017] UKUT (TCC) that on a proper analysis of the facts and relevant legal principles she had reserved such a benefit. The appeal of the Estate was therefore dismissed.

The case is of significance in testing the scope of a number of key House of Lords and Court of Appeal decisions in this area including Buzzoni v Revenue and Customs Commissioners [2013] EWCA Civ 1684.