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SUCCESSION PLANNING: Having your cake?

17 November 2017  

Jennifer Emms considers the outcome of schemes used to reduce IHT on the family home and outlines best practice

I am a fan of all things sweet, in particular, cake, whether of the sponge, fairy, or fruit variety. Autumn is a delightful time of year, not just due to the changing leaves and the start of crisp, cold days but because it heralds the beginning of my firm’s ‘bake off’. Contestants battle it out to wow their colleagues with an array of confectionary masterpieces and it is impossible to wander the corridor without appreciating the aroma of freshly baked goods: cookies; brownies; muffins… I digress. Lord Hutton once succinctly and, in my view, aptly, described the inheritance tax ‘gifts with reservation of benefit’ (or GWROB, as they are known) rules as legislation which ‘does not allow a donor to have his cake and eat it’. However, he also noted that (at least at that time) ‘there is nothing to stop him from carefully dividing up the cake, eating part and having the rest’.

Additional Info

  • Case(s) Referenced:

    Buzzoni (Executor of the estate of Lia Kamhi deceased) & ors v The Commissioners for Her Majesty’s Revenue & Customs [2014] WTLR 421

    Ingram & anor (executors of the estate of Lady Ingram (deceased)) v Inland Revenue Commissioners [1998] UKHL 47

    In re Nichols, deceased [1975] 1 WLR 534

    Street v Mountford [1985] UKHL 4

    Viscount Hood Executor of the Estate of Lady Diana Hood v HMRC [2017] UKUT 276 (TCC) (to be reported in the next Wills and Trusts Law Reports)