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This appeal was about whether the pension scheme transfer by the late Mrs Staveley, and her omission to take income benefits which were then payable, constituted, or are to be treated as constituting, for the purposes of the Inheritance Tax 1984 a “disposition” which is a “transfer of value” in favour of her sons, who were to be the beneficiaries of the death benefit.

By a majority, the Supreme Court partially allowed the appeal, holding that the omission gave rise to a charge to inheritance tax, but the transfer did not. It held that inheritance tax is chargeable on the value transferred by a “disposition” which is a “transfer of value” under the IHTA. Section 3(3) IHTA extends the meaning of “disposition” to include deliberate omissions by which the disponor’s estate is diminished and the value of another person’s estate is increased. Section 10(1) IHTA provides that a disposition that “was not intended, and was not made in a transaction intended, to confer any gratuitous benefit on any person” is not a “transfer of value” and so does not give rise to a charge to inheritance tax. Section 10(3) IHTA provides that a “transaction” for section 10(1) purposes “includes a series of transactions and any associated operations.

For judgment, please download: Judgment

For Court’s press summary, please download: Press summary

For a non-PDF version of the judgment, please visit: BAILII

To watch the hearing please visit: Supreme Court website: 31 October 2020 morning and afternoon session

To watch the judgment summary, please visit: Supreme Court website: 19 August 2020