This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our privacy notice.

Home loan scheme appeal allowed as loan note issued by trustees was not a debt incurred by the deceased

By Mark McLaughlin, April 2025

In an IHT home loan scheme, the Upper Tribunal overturned the First-tier Tribunal’s decision that liability under a promissory note was prohibited, as the note issued by the trustees was not a liability incurred by the deceased. 

Summary 

In an inheritance tax (IHT) home loan scheme, the Upper Tribunal (UT) overturned the First-tier Tribunal’s (FTT’s) decision that liability under a promissory note was prohibited, as the note issued by the trustees was not a liability incurred by the deceased. 

Background 

In November 2003, an individual (VE) entered into a home loan scheme for IHT purposes and disposed of her residence to the trustees of a settlement in which VE had an interest in possession (the ‘Life Settlement’) in exchange for an unsecured promissory note issued by the trustees of the Life Settlement. The promissory note was subsequently gifted

Subscribe to the McLaughlin’s Tax Case Library to get instant access
to the Tax Case Library.
14 day free trial , 90 day money back guarantee
Subscribe

Related or similar articles

Late application to appeal against an IHT determination refused
By Mark McLaughlin, May 2025
Charitable giving condition not satisfied for a reduced rate of IHT to apply
By Mark McLaughlin, November 2024
No IIP in respect of house where insufficient other assets to pay IHT on deceased’s estate
By Mark McLaughlin, March 2023
Deeds of appointment that had unintended legal and tax effects could be rectified
By Mark McLaughlin, July 2021
Donations To Political Party Did Not Qualify For Exemption
By Mark McLaughlin, February 2019