IHT: valuation of retained interest in income stream
In DM Watkins & CJ Harvey (Mrs KM Watkins’ Executors) v HMRC (TC01582 – 1 December) an 89-year-old woman (W) created a discounted gift trust in favour of her two sons (which was a potentially exempt transfer) but retained an interest in an income stream of £4 250 each three months. She died 15 months later. HMRC issued a determination charging IHT on the basis that the value of W’s retained rights was only £4 250 (ie one quarterly payment). Her executors appealed contending that the retained rights should be valued at about £49 000. The First-tier Tribunal rejected this contention and dismissed the appeal applying the principles in HMRC v Bower & Chesterfield (Mrs Bower's Executors) [2009] STC 510. Judge Cornwell-Kelly observed that ‘the evidence adduced by the appellant shows no...
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IHT: valuation of retained interest in income stream
In DM Watkins & CJ Harvey (Mrs KM Watkins’ Executors) v HMRC (TC01582 – 1 December) an 89-year-old woman (W) created a discounted gift trust in favour of her two sons (which was a potentially exempt transfer) but retained an interest in an income stream of £4 250 each three months. She died 15 months later. HMRC issued a determination charging IHT on the basis that the value of W’s retained rights was only £4 250 (ie one quarterly payment). Her executors appealed contending that the retained rights should be valued at about £49 000. The First-tier Tribunal rejected this contention and dismissed the appeal applying the principles in HMRC v Bower & Chesterfield (Mrs Bower's Executors) [2009] STC 510. Judge Cornwell-Kelly observed that ‘the evidence adduced by the appellant shows no...
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