Too late to claim

The taxpayer’s mother owned and lived in a property which was placed in a discretionary trust with the aim of saving inheritance tax. The main beneficiaries were her two children.

She was treated as having reserved a benefit over the house. The whole value of the property was therefore subject to inheritance tax on the basis the transfer into the trust had been a gift with reservation.

The son moved into the property after the mother's death in August 2004. He obtained a valuation from the district valuer and agreed to buy it for £325 000. As part of the purchase agreement he would pay his sister the appellant taxpayer her half-share and indemnify her against further capital gains tax.

In 2008 HMRC told the appellant they believed she had disposed of a residential property in 2005/06 but she did not appear to have...