Double Trust House Loan Scheme | Are you affected?
Double trust house loan scheme is a popular way to plan inheritance tax (IHT) in 2002/03. By managing sales from homeowners to trust for their own profits, debt for unpaid purchases can reduce the value of the house that is responsible to the IHT.
In recent years the case in this scheme has reached the Tax Court. HMRC has won twice (for different reasons) in the first Tier Tier (FTT). The Court of the Upper (UT) has now canceled the HMRC victory last year in FTT in the Elborne case.
We suspect that many of this scheme still exists and will be revealed when the original homeowner dies. Of course, it has been a long time since it is possible to make a further scheme like this. Many have been canceled in recent years and HMRC has tried to make it quite easy for taxpayers to surrender. But it will be worthy to postpone any concessions to HMRC now.
We believe that HMRC will almost certainly bring this to the appeal court next year or more. As a different conclusion from FTT and Ut Show, the decision there can go well.
HMRC asks a number of alternative arguments to attack the scheme in accordance with the taxpayer. Both FTT and UT have now found that all except one of the arguments is wrong.
The only point where FTT was found to benefit HMRC was the reduction in debt issued on sales by the original homeowner. FTT said that debt could not be deducted because it should have been considered issued by homeowners (see S103 from Finance Act 1986). UT has rejected this, saying that no one considered in this situation because the debt was issued by the guardian of the trust that the house sold.
If you are affected, contact Anthony Nixon. If you want
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