Charge applies

Assets in the first trust MDT were excluded property settled by MD who was non-UK domiciled. It would have been free from the ten-year anniversary charge (IHTA 1984 s 64) had it remained in that trust. Some of it was transferred to another trust DBJT which had the same settlor who had become domiciled in the UK so at that point it was no longer excluded property. It was then transferred back to MDT.

The taxpayers appealed against a determination of the ten-year charge. Barclays said the returning DBJT property had acquired or reacquired excluded status because it had become part of the overall MDT and when the MDT was created MD had not been domiciled in the UK. Therefore under s 48(3) all the property in the settlement was excluded.

Mr Justice Mann in the High Court said it was...