Donations to political party did not qualify for exemption

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Donations to the UK Independence Party made by an individual and companies he controlled did not qualify for the inheritance tax exemption for gifts to political parties. 
 
The appellant and companies he controlled made donations to the UK Independence Party (UKIP) between 7 October 2014 and 31 March 2015. The donations constituted transfers of value (within IHTA 1984, s 3), and the transfers of value comprising the donations made by the companies controlled by the appellant fell to be treated as having been made by him (under s 94).  

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At the UK general election preceding each of these donations (i.e. on 6 May 2010), UKIP did not succeed in having any of its candidates elected as members of Parliament. Consequently, the donations did not meet the conditions for inheritance tax (IHT) exemption in IHTA 1984, s 24 (‘Gifts to political parties’).  
 
However, the appellant asserted that insofar as the application of IHTA 1984, s 24 constituted a breach of the European Convention on Human Rights (ECHR), pursuant to HRA 1998, s 3 the tribunal must (as far as possible) read and give effect to s 24 in a way that was compatible with the ECHR rights. The appellant also argued that the present application of IHTA 1984, s 24 involved a breach of the UK’s obligations pursuant to Article 4(3) of the Treaty on European Union. If there had been a breach of EU law, the tribunal must either construe IHTA 1984, s 24 in a manner consistent with EU law or, if a conforming construction was not possible, disapply the offending provisions. 
 
The First-tier Tribunal (FTT) considered a number of questions arising from the appellant’s main argument that the application of IHTA 1984, 24 in the above way involved discrimination contrary to Article 14 of the ECHR together with Article 1 of the First Protocol to the ECHR (protection of property). The FTT concluded that it did not have powers to make a declaration of incompatibility under HRA 1998, s 4. The powers of the FTT were limited to determining whether or not the IHT determination by HM Revenue and Customs should be upheld. This ground of appeal was dismissed. 
 
In addition, the FTT rejected the appellant’s other arguments, i.e. that there had also been a breach of Article 14 taken together with Article 10 and Article 11, or a breach of Mr Banks’s rights under Articles 10 and 11 alone; that IHTA 1984, s 24 breached UKIP’s rights under ECHR; and the above EU law argument. The appellant’s appeal was dismissed. 

Banks v Revenue and Customs [2018] UKFTT 617