{"id":706725,"date":"2026-07-23T08:14:40","date_gmt":"2026-07-23T08:14:40","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/706725\/"},"modified":"2026-07-23T08:14:40","modified_gmt":"2026-07-23T08:14:40","slug":"families-defeat-hmrc-in-landmark-inheritance-tax-ruling","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/706725\/","title":{"rendered":"Families defeat HMRC in \u2018landmark\u2019 inheritance tax ruling"},"content":{"rendered":"\n

Families who tried to dodge inheritance tax using a controversial scheme could save substantial sums in death duties<\/a> following a landmark ruling. <\/p>\n

One family has knocked an estimated \u00a3700,000 off their inheritance tax bill thanks to a home loan scheme after the Court of Appeal rejected a challenge by HMRC. <\/p>\n

According to court documents, Leslie Elborne arranged a home loan scheme in 2003 with the aim of removing her \u00a31.8m house from her estate for tax purposes while continuing to live there rent-free. <\/p>\n

Thousands of home loan schemes were set up in the 1990s and 2000s, sometimes with the help of reputable wealth managers, to shield families from inheritance tax. <\/p>\n

Under the scheme, Ms Elborne sold the property to a trust for the benefit of her children in exchange for a loan note. She then gave this IOU to a second trust, also for the benefit of her children. Because she died in 2011, more than seven years later, this transfer left her estate and was not subject to inheritance tax. <\/p>\n

\"What<\/a> <\/p>\n

In a Court of Appeal judgment, Sir Launcelot Henderson concluded that Ms Elborne and her advisers had “succeeded in implementing an ingenious scheme”. <\/p>\n

He said the scheme worked because it predated changes in anti-avoidance legislation. Home loan schemes no longer work. <\/p>\n

Nick Porter, of Buckles Law, called it a “landmark decision” and a “rare win” for taxpayers over HMRC. <\/p>\n

He said: “This decision could potentially affect thousands of families in a similar position, and advisers with clients who used these arrangements, or who are facing HMRC challenges to them, should take note.” <\/p>\n

Mike Warburton, The Telegraph’s tax columnist, said: “HMRC never liked these schemes and came up with several grounds of attack. I believed that they worked at a technical level but warned that they carried a risk of attack, which proved to be the case. <\/p>\n

“The big problem was that it was seldom worthwhile for executors to challenge HMRC, given the high cost of a court action compared with the tax involved. So HMRC tended to win the cases by default when the executors backed down.” <\/p>\n

Inheritance tax is charged at 40pc on assets over the nil-rate band of \u00a3325,000, or \u00a31m for a couple who own their home and leave it to their descendants. Gifts made more than seven years<\/a> before the giver’s death are not subject to inheritance tax. <\/p>\n

HMRC chased Ms Elborne’s family for inheritance tax in 2017, arguing the home loan scheme did not work. In 2023, the dispute reached the First-tier Tribunal, which found that the family owed up to 40pc tax on the \u00a31.8m property. <\/p>\n","protected":false},"excerpt":{"rendered":"Families who tried to dodge inheritance tax using a controversial scheme could save substantial sums in death duties…\n","protected":false},"author":2,"featured_media":706726,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[84,234424,4176,2218,51217,10429,154567,234423,4174,4175,234425,56,54,55],"class_list":["post-706725","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-controversial-scheme","tag-finance","tag-hmrc","tag-home-loan","tag-inheritance-tax","tag-landmark-ruling","tag-leslie-elborne","tag-personal-finance","tag-personalfinance","tag-tax-columnist","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/706725","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=706725"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/706725\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/706726"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=706725"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=706725"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=706725"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}