Problem of ownership
- The importance of evidence when determining property ownership.
- The executor argued that his mother owned half of a property in his father’s name.
- The onus on the person seeking to show that the beneficial ownership is different from the legal ownership.
- An intention to transfer, even if evidenced is inadequate.
- Business property ownership should be subject to forensic analysis before tax planning takes place.
A recent tribunal case has helped to highlight the importance of keeping evidence of how property is owned – something of key importance for many family businesses. The judge in Lidher v CRC  UK FTT 153 considered whether a property was in the sole beneficial ownership of the deceased. There were also debates around money held in bank accounts, but the focus here is on property ownership.
Mr Baldhav Singh Lidher (Lidher) was the executor and trustee of the estate of his father, Bahall Lidher, who died on 6 March 2007. HMRC determined that inheritance tax was due after a deemed chargeable transfer on Bahall’s death. Lidher appealed on the basis that his father was not the sole beneficial owner of a freehold property in Southall, London, rather he owned only half of it. This case provides some guidance on how the ownership of business property is evidenced.
Understanding versus evidence
With any business property, it is essential that the ownership is understood and the legal position of all parties is clearly protected. In this ...