I have been advised that there has been a case where a gift was set aside when donor made the gift unaware that they had a terminal illness. Can this work the other way round where the donee is unaware they have a terminal illness? Daughter would never have made the gift if she knew mother was gong to die a year later.
QS Rose & Rose
I see no reason why the same principles cannot be applied to this scenario. However, I am not aware it has been tested before the courts and any ruling could, therefore, be more cautious.
I will probably be looking at counsels advice, however there is likely to be an offer on the gifted property in question and so client wants us to get the grant asap. Any advice on the best way to deal with this on the IHT400? Should I not include the property in the calculations but state the situation in the additional information section?
QS Rose & Rose
Best case, the gift is voidable rather than void so the property is currently owned by mother’s estate and has to be included on the IHT return. If a taxable estate, you could include a claim as a potential liability and attempt to value the claim based on its merits (with detail in the additional information to cover yourself).
I don’t know whether this could have a knock on effect when answering standard questions on the sale.
More widely, I haven’t seen the case to which you refer, but any claim here would like turn on whether the lack of knowledge amounted to a “mistake”. To my mind, the law is still pretty ambiguous in this area (ignorance of the illness doesn’t count but an incorrect assumption that mother was in good health might) so a case could come down to how the Judge felt about the fairness of the circumstances. My gut instinct is that such a claim would be pretty ambitious so I would not value it very highly but others may disagree.
Osborne Clarke LLP
I think the case you refer to is probably Ogden & Anor v Trustees of the RHS Griffiths 2003 Settlement.