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Is compensation paid to individuals whose businesses have failed due to mis-selling of financial products subject to Income Tax? In a decision that will disappoint many victims of bank wrongdoing, the First-tier Tribunal (FTT) has answered that question in the affirmative. The case concerned seven brothers whose property letting business had been mis-sold interest rate hedging products (IRHPs). The business subsequently failed, allegedly due to the high interest rates imposed by the IRHPs. After they lodged complaints, the relevant bank paid them basic compensation totalling almost £360,000. HM Revenue and...

Inheritance Tax (IHT) is not only payable on the value of the estate of a deceased person, but can also be levied on 'transfers of value' from the deceased's estate in the seven (exceptionally 14) years prior to their death. But what counts as a transfer of value? A recent court case led to a conclusion that many might see as unfair and rather counter-intuitive. It involved a woman who had been divorced from her husband since 2000. As part of the financial settlement on divorce, a 'pension split' was agreed...

You might think that where the boundaries of property lie should be clear, but boundary disputes are a fruitful source of argument in the courts. A recent case arose when, between contracts being exchanged on a property and the completion of its purchase, a row of hedging plants and trees that lay between the property and the neighbouring house had been cut back by the neighbours to the level of the earth bank on which they grew. The buyer claimed the plants were on her property, whilst the neighbours disputed...

It is a mark of a civilised society that anyone who suffers a wrong at the hands of state authorities is entitled to compensation. In a case on point, a prisoner whose release was considerably delayed when the Parole Board was stricken by staff shortages has won the right to substantial damages. The man was sentenced to imprisonment in 2008 after he was convicted of a serious assault. He was ordered to serve a minimum of three years and five months in prison. However, he was only released in 2017...