Donation to UKIP was a chargeable transfer for inheritance tax purposes

The taxpayer made a number of large donations to UKIP in 2014 and 2015. As these were not transfers to an individual they could not be potential exempt transfers and so would be chargeable to inheritance tax unless they were relieved by IHTA 1984 s 24. That gives exemption for gifts to political parties if either:

• two or more members of that party were elected at the last general election; or
• one member of that party was elected and 150 000 or more votes were cast for candidates for that party at the last general election.

At the time the donations were made UKIP had two MPs but they were both elected at by-elections and therefore neither of the above conditions were met. HMRC raised notices of determination to charge inheritance tax on the donations. The taxpayer appealed but lost before both the First-tier Tribunal and the Upper Tribunal.

Before...