John McIlhone v The Commissioners for HMRC
Decision date: 2 July 2026
Neutral citation: [2026] UKFTT 995 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal concerned whether assets of an Employee Benefit Trust created in 2007 constituted "relevant property" at the ten‑year anniversary for IHT periodic charge purposes. The Tribunal held the trust had been split into two discrete sub‑trusts (McIlhone and Walsh), each earmarked to benefit a named individual, so they did not meet the employee‑trust conditions and were subject to the periodic charge. The Determination was varied so that liability was assessed only on the McIlhone Sub‑Trust (£4,000,050) rather than the full £8m; the appeal otherwise failed on the single permitted ground.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
Where trust assets have been segregated into discrete sub‑funds that are earmarked to benefit a named individual, those sub‑funds must be characterised and assessed against the statutory employee‑trust conditions at the relevant ten‑year date; such sub‑trusts cannot be aggregated to defeat the periodic charge. A party’s concession that a trust qualified at inception does not bind the Tribunal, which must determine statutory characterisation at the relevant date.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal indicated that late applications to vary or set aside long‑standing directions were unlikely to succeed and properly refused; on the facts the arrangements were not a sham (documents intended legal effect, money moved) and there was an incidental corporate tax mitigation, but these remarks were ancillary to the decision.