When is property added to a settlement “excluded property”? – New Square Chambers

Posted December 9th, 2015 in HM Revenue & Customs, inheritance tax, news, taxation by sally

‘The decision of Mann J. in Barclays Wealth Trustees (Jersey) Ltd and Michael Dreelan v HMRC [2015]EWHC 2878 (Ch) answers an important question regarding what is excluded property for purposes of the Inheritance Tax Act 1984 s.48(3). This provides that foreign situs property which is settled property is excluded property for IHT purposes unless the settlor was domiciled in the U.K. at the time the settlement was made. Suppose a settlement was made when the settlor was domiciled outside the U.K, he subsequently becomes domiciled in the U.K and then adds foreign property to the settlement. Is the added property excluded property? HMRC have always contended that it is not. It has been argued in leading textbooks that it is. Mann J. has decided that HMRC are right.’

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New Square Chambers, 1st December 2015

Source: www.newsquarechambers.co.uk