Richardson v R & C Commissioners
| Jurisdiction | England & Wales |
| Judgment Date | 07 January 2009 |
| Date | 07 January 2009 |
| Court | Special Commissioners (UK) |
special commissioners decision
Richard Barlow
The appellant in person
Mr Colin Ryder for HM Revenue and Customs
Inheritance tax - interest
A special commissioner upheld a notice of determination issued under Inheritance Tax Act 1984 section 221IHTA 1984, s. 221 notifying the taxpayer as executrix of the deceased's estate that she was liable to pay interest in respect of the estate.
The deceased (V) had made three wills. In the first, dated 29 May 1961, she left her estate to the taxpayer ("as my daughter") subject only to the payment of debts, funeral and testamentary expenses. In fact the taxpayer was not V's daughter and she referred to her in that way because, at that time, she regarded her as like a daughter to her. In the second will, dated 3 July 1985, V left her estate to the Motor Neurone Disease Society and appointed a solicitor to act as the executor. A third will which was dated 29 May 1996 revoked the 1985 will and left the estate to the taxpayer.
The solicitor who had been appointed executor of the 1985 will and V, before her death, were both based in York, as was the taxpayer, but when V died on 30 September 2002 the taxpayer was not then apparently still in contact with V and no-one told the taxpayer that V had died for a year or so afterwards. By then the solicitor had started to administer the 1985 will. There was a long delay before the taxpayer was appointed executrix of the 1996 will but it was eventually proved and V's estate was valued at around £550,000.
HMRC claimed interest on the inheritance tax due in the sum of £19,662.74 based on Inheritance Tax Act 1984 section 233s. 233 of IHTA 1984 since the tax charged on the value transferred remained unpaid after the end of the period of six months beginning with the end of the month in which the chargeable transfer was made.
The taxpayer argued that it was unfair that the interest should be charged when it was no fault of hers that the estate took a long time to be administered and that the delays were caused by the solicitor who dealt with the 1985 will and the slowness of the courts in dealing with her application to have the 1996 will recognised and her appointment as executrix. She also claimed that she had been mislead or misdirected by HMRC.
Whether interest was properly payable on the inheritance tax due.
The special commissioner (Richard Barlow) (dismissing the appeal) said that the taxpayer's arguments about general unfairness, even if factually correct, could not override the unequivocal provisions of the statute. The special commissioners did not have any jurisdiction to waive tax otherwise due, even if there had been misdirection by HMRC (which the commissioner found was not the case) (Exors of Patch (dec'd) v R & C CommrsSCD(2007) Sp C 600 considered).
The taxpayer complained that she had not been sent statements of the interest as it accrued. There was no obligation on HMRC to send such statements and it could not have been done before August 2007 in any event by which time most of the interest had accrued. The taxpayer claimed that she or her husband had been told that the interest was frozen at about £13,000, but the person alleged to have said that denied he had used that word and his evidence was to be preferred to that of the taxpayer, whose evidence was inconsistent on that and other points. In particular they were unsure who was supposed to have been told the interest was frozen and yet claimed to have a clear recollection that that word had been used.
The taxpayer also complained that she had been told the interest was £13,520.11 and that £5,549.58 had been added to it, but in fact both sums were referred to in the Calculation of Inheritance Tax sent to her. The first figure related to the real property in the estate and the other to the other assets. By the time the tax was paid, a small amount of additional interest had accrued in addition to those amounts. Even if there had been an unreasonable delay in dealing with the matter on the part of HMRC, which the commissioner was satisfied was not the case in any event, that would not have afforded the taxpayer...
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