S.143 IHTA 1984 Compliance with Testator's Request

Trusts Discussion
1

s.143 IHTA 1984 makes clear that if a testator expresses a wish that property bequeathed by his will should be transferred by the legatee to others, then if the legatee complies with that request within two years of the testator’s death, then, for inheritance tax purposes, the gift is treated as it was made by the testator.

Does this provision apply to a gift of real property? My understanding is it would not as the word bequeathed only applies to personal property.

2

"IHTM35173 - Compliance with a testator’s request: transfers of land and to charity

You should refer to Technical any case where freehold land or an interest in it is transferred by a devisee and the taxpayers claim that IHTA84/S143 applies."
Commentators have mentioned personal chattels and even cash gifts as qualifying. The ludicrous comment above seems to fall under " No one has ever complained before". The possibility that HMRC has no settled position or that it has no idea at all stretches credulity. It does not say " This content has been withheld because of exemptions in the Freedom of Information Act 2000". Why not try an FOI request? Taxpayers should not have to wait for a Gotcha! after they are dead.
Jack Harper

3

Prima facie s143 would appear not to apply re a transfer of realty. However, it would seem HMRC may not take this view:

"IHTM35173 - Compliance with a testator’s request: transfers of land and to charity

You should refer to Technical any case where freehold land or an interest in it is transferred by a devisee and the taxpayers claim that IHTA84/S143 applies".

Malcolm Finney

4

Much of the various literature on s143 often makes no differentiation between “bequeath” and “devise”. Apart from my reference above to HMRC’s IHT manual I don’t think I have ever seen any other HMRC commentary which, as Jack indicates, is mind-boggling. The only case I believe on s143, Harding & Leigh v CIR [1997], is of no help in the current discussion.

It’s also a bit surprising that there has been no clarification by any poster on the TDF (unless I missed it).

Malcolm Finney

5

Thanks, Malcolm. I am in agreement that it seems it does not apply to real estate. I think HMRC’s manual supports that proposition as I think they are saying it should be referred to their Technical Department as they want the Technical Department to come up with the reasons why it should not apply.

Wentworth Gurney