In Rahman v Hassan [2024] EWHC 2038 (Ch), the family of the late Al-Hasib Al Mahmood has been permitted to appeal the High Court's decision regarding a deathbed gift of registered land.
Whilst this is not a tax case, its outcome has implications from an Inheritance Tax planning perspective.
- Masdur Rahman claimed his friend Al-Hasib Al Mahmood gave him all his UK assets in the week before his death in October 2020. As this was during the second COVID-19 lockdown, the testator did not have time to find witnesses for a new will. At the time there was temporary legislation allowing remote witnessing of wills of which the testator's will writer appeared not to be aware. Instead, the testator sent a text message revoking his will from 2015 and stating the claimant was to be the sole owner of his assets which included some bank accounts and a registered house.
- The only living witnesses to The gifts were the claimant and his wife. The beneficiaries from the earlier will disputed the position.
- In the original decision in May 2024, the judge was satisfied the gifts constituted valid donationes mortis causa or 'gifts in contemplation of death' but judgement was reserved on some points and the hearing adjourned.
- The judge received written submissions on various matters as a dispute had arisen between the parties after the original judgement regarding the 11 bank accounts listed. Inevitably, the claimant said they were included whilst the defendants said they were not.
- Unregistered land can be the subject of a donatio mortis causa but the position for registered land had not been established before this case.
- The original ruling determined that handing over the land certificate in respect of a house is sufficient to part with 'dominion' over that property but the defendants have been given leave to appeal which casts this finding into doubt.
- Other points are disputed including:
- Whether land certificates or copies of leases are indicia of title rather than evidence of ownership as the High Court judge had held.
- Whether passwords to online bank accounts and bank cards are indicia of title.
- Whether transfer of dominion and indicia of title is evidence of an intention to make a gift or if intention should be viewed as a separate requirement for a deathbed gift.
- The judge acknowledged the defendant's appeal should be heard as the issues relating to bank accounts and registered land could set an important precedent and were increasingly important in modern society, even if there was no real prospect of success on those points.
Useful guides on this topic
IHT: Estate planning checklist
This checklist covers some of the essential planning points that taxpayers should know when planning for their estate and Inheritance Tax (IHT).
Client Briefing: Making gifts & IHT
What gifts can you make without triggering Inheritance Tax (IHT)? What are the rules on making tax-effective gifts for IHT purposes?
External link
EWHC's approval of deathbed gift of registered land is to be challenged on appeal
Rahman v Hassan [2024] EWHC 2038 (Ch)
