Conditional disclaimer

The appellant was the wife executrix and residuary beneficiary of her husband’s estate.

She had separated from him three years before his death and received from him £3.5 million under a separation agreement.

In his will he left a legacy of £665 000 to the appellant’s son H from a previous marriage. H renounced the legacy in writing.

The residue of the estate was subsequently transferred to the appellant’s bank account. She transferred £1 million to H.

Referring to IHTA 1984 s 142 ‘Alteration of dispositions taking effect after death’ HMRC said that there was a direct causal relationship between the £1 million and H’s written disclaimer.

The appellant appealed saying that the renunciation had not been made in return for the payment of £1 million.

The latter sum was a gift from the appellant in fulfilment of a promise made several years earlier and...