David Marks (Executor of Hilda Marks) v The Commissioners for HMRC
Decision date: 23 July 2024
Neutral citation: [2024] UKFTT 706 (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 case concerned whether the reduced 36% IHT rate under Sch.1A IHTA applied by treating certain appointments as advances to beneficiaries (thereby combining the Will trust and free estate) and whether a leasehold flat (2 Dorchester Mansions) qualified for Business Property Relief. The Tribunal held the will and four deeds of appointment were unambiguous and operated as absolute appointments that depleted the residuary estate, so the reduced rate did not apply, and on the limited factual evidence the flat was predominantly an investment business and did not qualify for BPR. Both appeals were dismissed and HMRC’s determinations were upheld.
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 a will plainly gives trustees power to apply capital during a life interest, the charity remainder is computed by reference to the residuary estate remaining at the life tenant’s death; short, clear deeds of appointment expressed to transfer property absolutely should be given effect as absolute appointments unless clear admissible evidence shows a contrary common intention.
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 evidence consisting mainly of solicited letters, unproduced contemporaneous records and statements drafted with involvement of an interested principal is of limited weight. It also noted that niche service features (e.g. Kosher compliance) do not by themselves change the qualitative character of a holiday-let business absent detailed evidence of their commercial significance.