Foreign property was not relevant property

In September 1992 the settlor established a trust in Switzerland; at the time he was not domiciled in the UK. He added additional funds to the trust up to 6 April 2005 when he became deemed domiciled in the UK. In March 2006 he added a substantial amount of cash to the trust.

The trustee accounted for inheritance tax when a ten-year anniversary occurred in 2012. This was made on the basis that at that date the property held by the trustee included the property contributed after the settlor became UK domiciled. Therefore it was relevant property and not excluded property (IHTA 1984 s 48(3)). Two years later the trustee changed its view and requested a repayment.

HMRC refused saying the trustee had paid the tax ‘on a view of the law then generally received or adopted in practice’ (IHTA 1984 s 255)....