HM Revenue & Customs v Bower (Executors of the Estate of) & Ors

HM Revenue & Customs v Bower (Executors of the Estate of) & Ors

The Special Commissioner erred in law by inventing hypothetical speculators as buyers and by basing the valuation on uninformed guesswork rather than evidence; the statutory hypothesis does not require the invention of buyers if none exist in the real world.

Parties
Claimant: Commissioners for Her Majesty’s Revenue and Customs; Defendants: Executors of the Estate of Marjorie Edna Bower & Others
Jurisdiction
England and Wales
Judgment Date
05 November 2008
Procedural Posture
Appeal / Judgment
Outcome
appeal allowed
Legal Topics
Inheritance Tax, Valuation of Property, Statutory Interpretation
Tax Law Estate Law Inheritance Tax Valuation of Property Statutory Interpretation

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Parties

Commissioners for Her Majesty’s Revenue and Customs

Claimant

Executors of the Estate of Marjorie Edna Bower & Others

Defendants

Procedural Posture

Appeal / Judgment

Legal Issues

  1. 1 What is the correct method for valuing the right to monthly payments under an estate planning bond for inheritance tax purposes?
  2. 2 Does the statutory hypothesis under section 160 of the Inheritance Tax Act 1984 require the invention of hypothetical buyers in the open market?

Ratio Decidendi

The Special Commissioner erred in law by inventing hypothetical speculators as buyers and by basing the valuation on uninformed guesswork rather than evidence; the statutory hypothesis does not require the invention of buyers if none exist in the real world.

Court Disposition

appeal allowed

Orders

  • The Special Commissioner's decision is set aside.