In Jeremy John Hosking v HMRC [2026] TC09824, the First Tier Tribunal (FTT) found that political donations made by the appellant were not made from normal expenditure and were liable to Inheritance Tax (IHT).
Mr Hosking made political donations totalling £1,737,236 to campaigns supporting the UK leaving the EU. HMRC raised a determination on the basis that the donations failed to meet the requirement of being made out of ‘Normal expenditure’ and were therefore subject to IHT of £349,309, being chargeable transfers.
- Mr Hosking earned a substantial income from investment-related activities.
- The amount earned was significantly more than his personal living needs for himself and his family.
- Mr Hosking supported what he believed to be good causes with some of his surplus income.
- Over a seven-year period, Mr Hosking made approximately £10.8m in charitable donations and £11.9m in political donations.
- In total, during the period in question, he contributed approximately £47.5m to what he believed to be good causes. These included charitable stocks and investments.
- The donations fluctuated in relation to the needs of the relevant organisation and Mr Hosking's available cash resources, rather than the level of his surplus income.
- The donations queried by HMRC were a string of donations made to the campaign for the UK to leave the EU (Brexit).
- The gifts in question were only a ‘snapshot’ of donations made in relation to Brexit, as Mr Hosking was a long-time supporter of the cause.
Mr Hosking believed the donations were exempt transfers and not subject to IHT as:
- They were made out of his normal expenditure and exempt under s.21 IHTA 1984.
- They were political donations and exempt under s.24 IHTA 1984.
The First Tier Tribunal (FTT) found:
Mr Hosking made significant donations in both number and value over a period of many years. It was not out of character or abnormal to make the donations in question.
- The High Court's decision in Bennett & Others v IRC [1995] STC 54 must be applied to determine ‘normal expenditure’. The following points of principle were applied:
- The gifts must have accorded with a 'settled pattern of expenditure'.
- A settled pattern is established in two ways:
- By examining Mr Hosking's expenditure over a period of time.
- Mr Hosking must have assumed a commitment or adopted a firm resolution regarding future expenditure and complied with it.
- There is no fixed minimum period for the gifts to be ‘normal'.
- The pattern must have been ‘intended to remain in place for more than a nominal period and indeed for a sufficient period in order for the payment to be regarded as a regular feature of the transferor's annual expenditure’.
- It is not necessary that the amount of gifts be fixed.
- The recipient of the gift does not need to be the same.
In line with Bennett, no documented evidence showed Mr Hosking had committed to provide financial assistance to support the campaign or had made a decision to do so.
- Examining expenditure over time, if the gifts were taken in isolation, they only covered a period of nine months, which was not sufficient time to establish a settled pattern.
- There was no formal or standard amount given, and Mr Hosking could not provide a reason for giving the amount he did at any given time.
- There was no pattern or regularity to the donations made, and he was unable to quantify the amounts himself.
Concerning the political donation exemption, s.24 applies only to well-established political parties that have met a specified minimum level of representation. The campaign groups to which Mr Hosking made donations did not meet the criteria for s.24.
As such, Mr Hosking believed he was discriminated against as he was a member of the Conservative Party and was unable to express his support for the leave campaign through donations at that time.
The FTT found:
- S.24 does discriminate between political donations made to qualifying parties and those made to non-party political organisations, but the discrimination is not based on the political opinion of the donor.
- Mr Hosking was unable to make donations to a Conservative Party that supported leave simply because one did not exist, not because s. 24 directly discriminated against such a party.
The appeal was dismissed.
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