Summary
Excluded property settled by a non-UK domiciled settlor that was transferred to a second trust with the same settlor who had by that time become UK domiciled, the value of which was subsequently transferred back to the first trust, remained excluded property for inheritance tax purposes.
Background
On 21 June 2001, the second appellant (MD), who was then non-UK domiciled, settled £100 on the first appellant, a Jersey resident discretionary trust (Trust 1) and subsequently added cash sums from bank deposits held in Jersey. The trust property was excluded property for inheritance tax (IHT) purposes (under IHTA 1984, s 48(3)(a)).
MD subsequently became deemed domiciled in the UK (under IHTA 1984, s 267) from the beginning of the tax year 2003/04. On 4 April 2008, MD and his three brothers set up another trust (Trust 2). Each brother had a one-quarter
