The Personal Representatives of Rachel Frances Staveley Deceased v The Commissioners for Her Majesty's Revenue & Customs
| Jurisdiction | UK Non-devolved |
| Judgment Date | 10 January 2017 |
| Neutral Citation | [2017] UKUT 0004 (TCC) |
| Appellant | David Rees, instructed by Farrer & Co LLP, for the Respondents/Cross- |
| Respondent | THE COMMISSIONERS FOR HER MAJESTY’S REVENUE AND CUSTOMS Appellants and Cross- |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Appeal Number | UT/2014/0053 |
[2017] UKUT 0004 (TCC)
Appeal numbers: UT/2014/0051
UT/2014/0053
INHERITANCE TAX – whether transfer of funds to a personal pension
plan was a transfer of value – Inheritance Tax Act 1984, s 3(1) and s 10 –
whether deceased’s omission to take lifetime pension benefits was to be
treated as a disposition and transfer of value – s 3(3) IHTA
UPPER TRIBUNAL
TAX AND CHANCERY CHAMBER
THE COMMISSIONERS FOR HER MAJESTY’S
REVENUE AND CUSTOMS Appellants
and Cross-
Respondents
- and -
(1) RICHARD WILLIAM JAMES PARRY
HENRY FRANCIS ALEXANDER PINEY
TOBY ANTHONY STAVELEY
(as personal representatives of Rachel Frances
Staveley, deceased)
(2) HENRY FRANCIS ALEXANDER PINEY
(3) TOBY ANTHONY STAVELEY
Respondents
and Cross-
Appellants
TRIBUNAL:
MR JUSTICE BARLING
JUDGE ROGER BERNER
Sitting in public at The Royal Courts of Justice, Rolls Building, Fetter Lane,
London EC4 on 14 and 15 December 2016
Elizabeth Wilson, instructed by the General Counsel and Solicitor to HM
Revenue and Customs, for the Appellants/Cross-Respondents
David Rees, instructed by Farrer & Co LLP, for the Respondents/Cross-
Appellants
© CROWN COPYRIGHT 2017
DECISION
1. This appeal and cross-appeal concern notices of determination to inheritance tax
made by HMRC in respect of two alleged lifetime transfers of value by the late Mrs 5 Rachel Frances Staveley, who died on 18 December 2006.
2. The alleged transfers of value arose out of the transfer, in November 2006, by
Mrs Staveley of funds out of one registered pension scheme (“the s 32 policy”) into
another (“the AXA PPP”), and the omission of Mrs Staveley during her lifetime to
take any lifetime benefits from the AXA PPP. The determinations were made on Mrs 10 Staveley’s personal representatives, and on her two sons, Mr Piney and Mr Staveley,
who were the beneficiaries of the death benefit paid out of the AXA PPP after the
death of Mrs Staveley.
3. The personal representatives, and Mr Piney and Mr Staveley in their capacities
as beneficiaries appealed to the First-tier Tribunal (“FTT”) against those 15 determinations. The FTT (Judge Mosedale and Mr Menzies-Conacher) allowed the
appeals in respect of the transfer of funds to the AXA PPP, but dismissed the appeals
so far as they concerned the omission by Mrs Staveley to take lifetime benefits.
HMRC appeal, with permission of the FTT and of this tribunal, in respect of the first
issue; the personal representatives and Mr Piney and Mr Staveley as beneficiaries 20 cross-appeal, with the FTT’s permission, on the second issue.
The facts
4. The findings of fact of the FTT are set out at [6] to [40]. We can summarise
them quite shortly.
5. The s 32 policy had derived from the transfer, in July 2000, of funds out of Mrs 25 Staveley’s share of a company pension scheme, the AXA Morayford Executive
Pension Plan, established by Morayford Limited (“Morayford”), a company set up by
Mrs Staveley with her ex-husband. The transfer from that scheme into the s 32 policy
had followed an acrimonious divorce and advice received by Mrs Staveley that her
only transfer option was into the s 32 policy, and that she would not be able to transfer 30 into a personal pension plan (“PPP”) until 10 years after her departure from the
company.
6. Mrs Staveley had also been advised that any surplus in the s 32 policy would be
returned to Morayford. The significance of that was that her pension was over-funded
in respect of her level of salary. Otherwise, it was provided by the s 32 policy that if 35 Mrs Staveley died without taking lifetime benefits, the trustees would pay such death
benefits as there were to her personal representatives. The minimum age for
accessing the pension was 50, and as Mrs Staveley was 50 years of age in 2000 she
could have accessed the pension under the s 32 policy at any time after that.
7. Mrs Staveley remained very concerned that the pension fund could revert, in 40 whole or in part, to the benefit of her ex-husband or his new family. The FTT found,
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