
The widow of a millionaire who died in his 20s, has been left with a six figure tax bill as a result of a misunderstood Inheritance Tax rule.
Tom Makin, heir to the sporting empire, JD Sports, tragically died from bone cancer at the aged of 29.
Having met in 2008 on her first day working at his father’s business, Kirsty Makin helped Tom during his eight-year cancer battle, which began when he was just 21 years of age.
One year before Tom and Kirsty got married, he decided to give her a half-stake of his £1.8million home.
Soon after their return from a honeymoon in the Maldives, the couple were given the devastating news that Tom had six months left to live.
Tom believed he had put in place robust estate planning measures to safeguard the financial security of his wife.
However, shortly after his funeral, his family were told that the half-share gift of the house would draw an Inheritance Tax bill of as much as £300,000, as the couple were not officially married when the transfer took place.
Makin’s estate executors are now pursuing the matter through the High Court in a bid to have the gift revoked.
Believing that it should be officially declared as a mistake along with the annulment of any documents indicating the couple were joint tenants of the house, the court claim states that “Mr Makin made the gift by mistake, in that he believed that would not create an Inheritance Tax liability on his death”.
Additionally, the claim states that “[it] would not have been incurred had the house been solely owned by Mr Makin and passed under his last will”.
Mr Makin’s parents and his wife do not contest the court claim, although the legal claim is technically brought against them.
Laura Stock, a Senior Associate with Palmers, who specialises in Inheritance Tax matters, said: “Robust estate planning can protect your hard-earned assets for the benefit of your loved ones and provide much needed financial security, but it requires expert input because, as this case illustrates, Inheritance Tax can be a potential legal minefield.”
For help and advice on all aspects of estate planning, including IHT, trusts and gifts, please get in touch with our expert team today.