Product category:
Savings and investment
News Release from: Standard Life Bank | Subject: Investments
Edited by the Insidemoneytalk Editorial
Team on 18 April 2008
Standard Life comments on HMRC's appeal
in Axa trust case
HM Revenue and Customs (HMRC) has announced its appeal against the decision in the case of the executors of the late Mrs Bower and the Commissioners for HMRC.
The issue being considered relates to the value of the lifetime gift made by the late Mrs Bower, when she set up a discounted gift trust in 2002 Mrs Bower died five months after making the gift to the trust
This article was originally published on Insidemoneytalk on 14 May 2007 at 8.00am (UK)
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A key issue was the age of the settlor at the point she made the gift to the trust.
HM Revenue and Customs (HMRC) contend that someone aged 90 or over would receive little or no discount since someone of that age would be uninsurable.
The executors of the late Mrs Bower did not agree with that position and argued that a discount should apply.
In February 2008, the Special Commissioner decided partly in favour of Mrs Bower's executors and set an adjusted discount figure as a result.
Pending the outcome of the appeal, HMRC has posted a holding statement on its website.
It says that any open cases already being considered will remain under review, and that they will continue dealing with any new cases, but will not press for payment of additional inheritance tax prior to the outcome of the current litigation.
Commenting on the appeal, Julie Hutchison, Head of Estate Planning at Standard Life said, "Whilst the executors of the late Mrs Bower are, I suspect, disappointed that HMRC has appealed the decision, the final outcome once all steps are heard will bring clarity one way or the other for advisers and their clients on whether settlors over the age of 90 should receive a discount.
Solicitors dealing with estates where the client had a discounted gift trust and was over age 90 at set-up can refer to new guidance just posted onto the HMRC website.
This holding statement (Revenue and Customs briefing 23/08) sets out the approach HMRC plan to take to cases which are new and pending.
I welcome the statement that HMRC will not press for payment of additional IHT pending final resolution of the Bower case".
Standard Life offers a Discounted Gift Plan with its onshore and offshore investment bond.
Go to www.adviserzone.com/literature/iht/index.php for more information.
The HMRC briefing note 23/08 can be found on www.hmrc.gov.uk/briefs/inheritance-tax/brief2308.htm.
The May 2007 Technical Note from HMRC can be found on www.hmrc.gov.uk/cto/dgs.htm.
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