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