Trustees’ actions could not be recharacterised

Samuel Marks (SM) died in April 2014 and his wife Hilda (HM) died in October 2015. SM's will provided for various pecuniary legacies with the residue of his estate to be held on trust for his wife (the will trust).

HMRC conducted a review of the inheritance tax (IHT) account partly in respect of a claim for business relief (BR) on a holiday let but also for some valuation issues. It later issued determinations against which the taxpayers appealed.

The first issue before the First-tier Tribunal concerned the reduced rate of inheritance tax of 36% available when a person leaves at least 10% of their net estate to a charity. In essence in his will SM left 25% of his estate to charity but subsequent gifts to grandchildren resulted in less than 10% of the estate being available to donate.

The tribunal accepted the trustees would have acted differently...