Balance in favour of HMRC

Disclosure of medical records to determine inheritance tax liability

Lady Edwards-Moss died in February 2007. She transferred a property out of her estate in return for an annuity 17 days before she died. In 2014 HMRC said the transfer was ineffective and issued her executors (her sons) with a notice of determination under IHTA 1984 s 221. They appealed and during the process HMRC applied for disclosure of the deceased’s medical records. The executors opposed this on the grounds of relevance and privacy.

HMRC’s alternative objection was that the property had been transferred at an undervalue and therefore failed as a potentially exempt transfer for inheritance tax.

The notice of determination covered the first issue – that no transfer had taken place – so the taxpayers argued that HMRC should not be allowed to argue the second. The First-tier Tribunal referred to the Supreme Court’s decision...