BOOK REVIEW: McCutcheon on Inheritance Tax (Seventh Edition)
Authors: Withers LLP, Aparna Nathan and Marika Lemos Published by Sweet & Maxwell
Inheritance tax (IHT) has probably not been the fastest-moving UK tax in terms of legislative changes in years gone by, but it certainly seems to have been catching up in more recent times. ‘McCutcheon on Inheritance Tax’ is a long-established and recognised authority on IHT. The first edition was published back in in 1980. Thirty-seven years later, in 2017 the seventh edition has now been published, only four years after the sixth edition in 2013. This perhaps indicates that keeping up-to-date with new and amended IHT legislation is becoming more of a challenge, not to mention keeping abreast of new case law, changes of practice and approach by HM Revenue and Customs, etc. ‘McCutcheon on Inheritance Tax’ should help IHT practitioners to meet that challenge.
As the preface to the seventh edition points out, since the sixth edition there have been a number of significant developments in relation to IHT, including: changes to reduce the IHT effectiveness of ‘pilot trusts’; the extension of the disclosure of tax avoidance schemes provisions to cover IHT; changes to ‘deemed domicile’ status for IHT purposes; changes to the tax treatment of pensions; and the introduction of the ‘residence nil rate band’ rules. The authors express the hope that the discussions in the book on those subjects will both assist and be of interest to fellow practitioners. In addition, important IHT cases including Buzzoni and Hood (reservation of benefit) and Hutchings (penalties for errors in IHT returns) are also covered in this edition of the book.
‘McCutcheon on Inheritance Tax’ has been written with great skill and expertise to a high technical level. This is hardly surprising, given that its current authors are top law firm Withers LLP, together with Aparna Nathan and Marika Lemos, who are both tax barristers practising at Devereaux Chambers. However, the clear and easy-to-read commentary and helpful and practical structure of this book means that IHT practitioners of all technical levels can potentially benefit from its contents.
The book is divided into four parts. Part one covers the main IHT charging provisions, with chapters including transfers of value, exempt transfers, the nil rate band, potentially exempt transfers, chargeable lifetime transfers and reservation of benefit. Part two covers the special IHT charging provisions relating to settled property. Parts one and two both include an ‘overview’ chapter, which provides a very useful introduction to the structure of the IHT regime dealt with in those parts and the chapters which follow. Part three deals with ‘special subjects’ including valuation, business and agricultural property relief, partnerships and IHT administration. Part four is ‘the international dimension’, with chapters on the territorial scope of IHT (domicile, excluded property and situs), double taxation relief and aspects of international estate planning.
As someone who has used ‘McCutcheon on Inheritance Tax’ in private client work, I have personally found the chapters dealing with reservation of benefit and business property relief particularly helpful; but other practitioners who use this book on a regular basis will no doubt have their own particular favourites. Worked examples are also a very helpful feature of a technical book such as this..
At 1,456 pages, ‘McCutcheon on Inheritance Tax’ is a weighty tome. The page count says a lot about the depth of commentary in the book. Whilst the commentary is written to a high technical level, it is nevertheless very easy to follow and comprehend. The authors have a real talent for explaining relatively complex provisions succinctly and with great clarity. Paragraphs are generally short but concise, and are therefore relatively easy to understand and digest.
On a practical level, one disadvantage of such a thick, heavy book is that it is not very portable; an online version would be extremely useful, or at least a CD to accompany the book. ‘McCutcheon on Inheritance Tax’ costs £295. This is a not inconsiderable amount of money to pay for a single book, and probably above average for a tax publication. But this is not an average tax publication. For a recognised authority on IHT of such length and depth, it has to represent very good value for money, particularly when compared to other publications of a similar type and technical standard.
In conclusion, ‘McCutcheon on Inheritance Tax’ is comprehensive in its coverage of IHT, and yet is concise in its commentary. It is a technically advanced authority, and yet is very clear in its explanations of complicated legislation, and is relatively easy to read and digest. It would surely be an invaluable part of the tax library of any practitioner or firm that regularly advises clients on IHT issues, and a constant point of reference. Practitioners who do not deal with IHT issues on a day-to-day basis should also find this publication a useful addition to their tax library. Those who do not already possess a copy of the book are strongly recommended to obtain one.