Q&As

Where a Will leaves the residuary estate in unequal shares to a charity qualifying for the inheritance tax charity exemption and a non-exempt beneficiary and there is no clear wording as to whether the Re Benham or Re Ratcliffe approach should be taken, is there a default position?

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Produced in partnership with Lynne Counsell of 9 Stone Buildings
Published on LexisPSL on 26/03/2018

The following Private Client Q&A produced in partnership with Lynne Counsell of 9 Stone Buildings provides comprehensive and up to date legal information covering:

  • Where a Will leaves the residuary estate in unequal shares to a charity qualifying for the inheritance tax charity exemption and a non-exempt beneficiary and there is no clear wording as to whether the Re Benham or Re Ratcliffe approach should be taken, is there a default position?
  • The possible approaches
  • Re Benham and Re Ratcliffe
  • Summary

Where a Will leaves the residuary estate in unequal shares to a charity qualifying for the inheritance tax charity exemption and a non-exempt beneficiary and there is no clear wording as to whether the Re Benham or Re Ratcliffe approach should be taken, is there a default position?

The issue was first considered by the court in the much criticised decision of Re Benham’s Will Trusts and reconsidered in Re Ratcliffe, Holmes v McMullen.

The specific question relates to the situation where a Will leaves the residuary estate in unequal shares to a charity qualifying for the inheritance tax (IHT) charity exemption (under section 23 of the Inheritance Tax Act 1984 (IHTA 1984)) and a non-exempt beneficiary. The question is when there is no clear wording as to whether the Re Benham or Re Ratcliffe approach should be taken is there a default position?

The exempt beneficiaries in these cases were charities but the principles apply where part of the residue goes to a spouse or civil partner or to any combination of exempt and chargeable beneficiaries (HMRC Manuals: IHTM26171).

For further information, you may find Practice Notes: Apportionment of IHT burden on death and Charities and inheritance tax useful for your purposes.

The possible approaches

There are only three possible ways as to how tax can be assessed in such a situation:

  1. IHT is paid as part of the

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