HMRC Unsuccessfully Challenges Tax Reducing Rectification

The England and Wales High Court (EWHC) has agreed to rectify two deeds of appointment made in 2013 that mistakenly terminated Nicholas Ware’s life interest, a qualifying pre-March 2006 life interest, in the assets of his late father, when they were intended only to add certain persons as additional default beneficiaries. The rectification significantly reduced the trusts’ tax liability by taking it out of the inheritance tax relevant property regime. The mistake would have ensured that the trusts’ entered the relevant property regime.

HMRC chose not to be joined as a party, but drew the cases of Racal v Ashmore (1995 STC 1151) and Allnutt v Wilding (2007 EWCA Civ 412) to the EWHC’s attention as suggesting that rectification should not be permitted (Ware v Ware, 2021 EWHC 694 Ch).

Further details of the case may be found at: