54. French usufruits and their continued misstreatment by HMRC even after the Court of Appeal Judgment in Barclay's Wealth
November 13th 2020
As there is apparently litigation afoot in relation to French
Usufruits and s.43(2) ITA 1984, I have prepared a short commentary
on the recent unanimous decision of the Court of appeal in
Barclay's Wealth in which the scope of s.43(2) can be said to have
been restricted to trust and not to outcomes.
HMRC have had to settle my "pré-contentieux" on these issues, so
if this helps anyone else involved in an issue, with
HMRC on this point please do not hesitate to contact me for
specific advice, aprticularly if your adviser seems out of their
depth in the middle of the definitions on either side of the
Channel. A Frehc lawyer is unlille to e fmailar with a trust let
allone asettklemeht, an dan Englsh lawyer is probaly not used to
rhe treatment of civil law concepts and the manner in which the
English Courts, not HMRC, have treated them historicaly. Ther
are certain principles that have not been and cannot be overtaken
or overruled by HMRC.
This is certainly not the only point against HMRC's view, but it
shows I hope that the Inheritance Tax Act 1984 has been
overextended by them to cover foreign dispositions that were not
within the scope of its Chapter III on settlements, and that
Parliament cannot be construed as having intended these to be taxed
as settlements on the wording which it used.
Please enjoy the reading: French usufruits and HMRC's attempt to deem
settlements