GD Cairns (VDE Webb's Personal Representative) v HMRC

Sp C [2009] SSCD 479; [2009] UKFTT 67 (TC); TC0000

The deceased taxpayer left a house in his will.  The solicitor acting as executor for the deceased’s estate valued the property at £400,000 on the form IHT200.  HMRC subsequently formed the opinion that this valuation was too low and issued a penalty summons for £33,000, under IHTA 1984, s 249(4); the solicitor appealed.  The Special Commissioner dismissed the summons, holding that it was 'wholly lacking in specification'. The Commissioner held that 'the initiating document, be it summons, summary complaint or indictment must set out the parameters of the enquiry, and the essential facts and basis in law upon which the public authority relies.  The solicitor was 'entitled to fair notice of the allegations being made against him and a reasonable opportunity to respond to them’, particularly where the proceedings involve allegations of fraud or negligence'.

With regard to the specific facts of the case, it was held that the form IHT200 should have specifically declared that the valuation of the house was 'a provisional estimate'. Accordingly 'there had been a narrow, technical failure to comply with the provisions' of IHTA 1984 s 247(1). However the penalty should have been reduced to 'a nominal amount.