»Ê¹ÚÌåÓýapp

»Ê¹ÚÌåÓýapp case of Bennett and others v Inland Revenue Commissioners [1995] STC 54 involved consideration of the first condition (IHTM14231) for exemption that the gifts made should form part of the normal expenditure of the transferor.

»Ê¹ÚÌåÓýapp judge’s view (Lightman J) was that the term normal in this context:

‘connotes expenditure which at the time it took place accorded with the settled pattern of expenditure adopted by the transferor.�

He considered that the existence of the settled pattern could be established in two ways:

• an examination of the transferor’s expenditure over a period of time may reveal a pattern, for example a payment each year of 10% of all income to charity or members of the individual’s family, or
• the individual may be shown to have assumed a commitment, or adopted a firm resolution, regarding their future expenditure and then complied with it. »Ê¹ÚÌåÓýapp commitment may be legal, religious or moral. »Ê¹ÚÌåÓýapp commitment or resolution need have none of these characteristics but may still be effective to establish a pattern, For example, to pay the annual premiums on a life assurance policy gifted to a third party or to give a pre-determined part of one’s income to one’s children.

Before turning to the facts of the case, the judge summed up the requirement for expenditure to be normal:

‘What is necessary and sufficient is that the evidence should manifest the substantial conformity of each payment with an established pattern of expenditure by the individual concerned - a pattern established by proof of the existence of a prior commitment or resolution or by reference only to a sequence of payments.�

Refer any challenge to this view, or to the way the IHTA84/S21 legislation has been applied, to Technical.