McCutcheon on Inheritance Tax Review

By Barry McCutcheon and Withers LLP

Reviewed by Mark McLaughlin CTA (Fellow) ATT TEP, Editor of TaxationWeb

The publishers, Sweet & Maxwell, describe McCutcheon on Inheritance Tax as 'the leading authority on inheritance tax'. My expectations of this book were therefore very high. I am pleased to report that I was not disappointed!

My preconceptions about McCutcheon on Inheritance Tax included that the book would be a highly technical, authoritative work, which would be best suited to inheritance tax (IHT) specialists. I believe that those preconceptions were partly correct, but only in the sense that the book has been written with great skill and expertise, and to a highly advanced technical level. However, the authors state that the underlying purpose of the book is to enable its readers to genuinely understand how IHT works. An overview of IHT generally is therefore provided in the opening Chapter, and there is a further overview Chapter dealing with settled property with no qualifying interest in possession (more commonly known as 'discretionary trusts'). These Chapters provide a useful grounding to IHT and discretionary trusts, and set the scene for the Chapters that follow.

This is the fourth edition of McCutcheon on Inheritance Tax. Surprisingly, the third edition was published around 18 years ago, back in 1988. Having reviewed this book, I certainly hope that I do not have to wait another 18 years for the fifth edition! Inheritance tax has not been the fastest changing of taxes in recent years in terms of legislative reforms or changes in practice. The publishers state that McCutcheon on Inheritance Tax may be supplemented in the future 'to keep your main work up-to-date…'. However, a looseleaf format with annual updates may be worth considering.

Contents

This impressive looking hardback publication is a massive 1,079 pages long. McCutcheon on Inheritance Tax is divided into four parts. Firstly, the main charging provisions section covers the structure of IHT and how it applies during lifetime and on death. It also contains a Chapter on Reservation of Benefit, which includes the 'Pre Owned Assets' income tax regime that was introduced as a result of IHT avoidance arrangements. Secondly, the special charging provisions section deals with discretionary trusts, and the IHT charges related to them. Thirdly, the special subjects section deals with specific aspects of IHT, such as business and agricultural property reliefs, other forms of IHT relief, an interesting Chapter on settled property definitions, and a useful Chapter on IHT administration. Fourthly, the international dimension section includes Chapters on the territorial scope of IHT covering domicile, together with aspects of international estate planning. The book's index is fairly comprehensive for ease of reference.

The authors have a real talent for explaining relatively complex provisions succinctly, and with great clarity. Paragraphs are short but concise, and therefore easier to comprehend and digest. Numerical worked examples are also a fairly prominent feature of the book, illustrating some of the computational aspects of IHT and providing a deeper, practical understanding of the law.

The book refers to the Inland Revenue Advanced Instruction Manual. This manual was withdrawn by the Inland Revenue (now HM Revenue & Customs) and replaced by the Inheritance Tax Manual. In fact, the former manual was apparently withdrawn when the authors were in the process of writing this edition of the book. The fifth edition will no doubt be updated to include references to the new Manual.

Cost

McCutcheon on Inheritance Tax costs £195. This is a not inconsiderable amount of money to pay for a single book, and probably above average for a publication on tax. However, for an authoritative work on IHT of such length and depth, it has to represent very good value for money.

The Verdict

McCutcheon on Inheritance Tax is comprehensive in its coverage of IHT and yet concise in its commentary. It is a technically advanced authority, and yet it is very clear in its explanations of complicated legislation and relatively easy to read and digest.

From a personal standpoint, I hope that the authors and publishers will update the book at regular intervals (perhaps in looseleaf format?), rather than periodically. Whilst IHT has not been the fastest moving of taxes in recent years in terms of legislative changes, it is very important to stay abreast of changes in practice and, perhaps more importantly, the views of HM Revenue & Customs Capital Taxes on their interpretation of the legislation. The expert and insightful views of the authors in these areas will be invaluable to professionals engaged in giving advice on IHT at virtually every level.

McCutcheon on Inheritance Tax would surely grace the tax library of any practitioner or firm that regularly advises clients on IHT issues. I have no doubt that it would be a regular point of reference. Those who do not already possess a copy of this book are strongly recommended to obtain one, to see for themselves.

As mentioned in the introduction, my expectations of McCutcheon on Inheritance Tax prior to reviewing it were high. I have to say that those expectations were met and exceeded. I was highly impressed with this publication.

Mark McLaughlin
TaxationWeb
October 2005

Article Added Friday, 10 October 2008

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