E1: Transfer of pension

IHT transfer of value: no gratuitous intent exclusion

 

Was the disponor intending, by the overall effect of the disposition, to put the recipient in a better position?

"[61]...I do not think it is appropriate to speak of a disposition having been intended to confer any gratuitous benefit if the recipient of the benefit was intended to receive no more than he would have had in any event. It is necessary, therefore, to ask whether the disponor was intending, by the overall effect of the disposition, to put the recipient in a better position, or, to borrow from what Newey LJ said at para 88, putting things broadly, to ask whether the disposition was being used to improve someone’s position on a gratuitous basis." (HMRC v. Parry [2020] UKSC 35)

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Legislation: IHTA s.10

HMRC manuals:

Commentary: 

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Associated operations will taint a transfer if part of and contribute to a scheme intended to confer a gratuituous benefit

"[88]...In Macpherson, the two elements under consideration were linked in the scheme by a common intention - the trustees would not have made the appointment if the variation had not taken place - and the scheme was one intended to confer, and actually conferring, gratuitous benefit on the son by the appointment of the pictures. The variation agreement therefore satisfied Lord Jauncey’s requirements that it “form a part of and contribute to a scheme which does confer … a [gratuitous] benefit” (my emphasis) and is intended to confer a gratuitous benefit. In the present case, the transfer to the PPP and the omission to take lifetime benefits were not, in fact, relevantly linked in a scheme. The omission had already been decided upon whilst the funds were in the section 32 policy and the sons could have benefitted from it without any move to the PPP. Moving the funds from one policy to the other (the “transfer”, focused upon by the Notice) was not a contributory part of the scheme to confer gratuitous benefit on the sons; it was a step taken solely to ensure that Morayford could not benefit, as the FTT were entitled to find on the very unusual evidence in this case. The omission and the transfer were not therefore, in my view, relevantly associated." (HMRC v. Parry [2020] UKSC 35)

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Legislation: IHTA s.10, s.268

HMRC manuals:

Commentary: 

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