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The deceased a widow died in January 2007. She had inherited money from her father which she had invested in a building society in her sole name.
She transferred the whole sum in 1999 into a newly opened account held jointly between herself and her son the taxpayer. They each declared half of the interest arising on the account.
The taxpayer said his late mother had intended to gift half the money to him when the account was opened but he did not need it so he left it alone.
On this basis he claimed inheritance tax (IHT) was due only on his mother’s half of the sum invested. HMRC argued that the whole amount was liable under IHTA 1984 s 5(2) or as a gift with reservation.
The First-tier Tribunal accepted that the deceased had intended to make the gift when she...
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