In I P Barker v Baxendale Walker Solicitors and others [2017] EWCA Civ 2056 (8 December 2017) the Court of Appeal found that a firm of solicitors should have warned its client about the specific risk that a scheme would not work.
This was a professional negligence case in relation to advice on a tax avoidance scheme designed to avoid both CGT and IHT. The scheme recommended by Baxendale involved the establishment of an employee benefit trust (EBT) offshore the transfer of company shares by way of gift to the EBT and the creation of a sub-trust the beneficiaries of which included members of the transferor’s family (although they were excluded from benefit until after the death of the transferor).
The issue was whether a reasonably careful practitioner should have warned Mr Barker before he transferred his shares to the trustees of the EBT ...
