Phizackerley’s impact on will trust planning has been exaggerated, says John Hendry
Last year’s special commissioner’s decision in Phizackerley v Revenue & Customs Commissioners [2007] UKSPC SPC00591, [2007] STC (SCD) 328 was presented in some quarters as a threat to nil rate band discretionary trust planning or even to will trust planning in general. But this decision related to one particular arrangement made vulnerable by its particular facts and the procedures followed. The facts were unusual, although hardly unique. The fatal flaw lay in the action taken when the discretionary will trust came to be put into effect.
THE HISTORY
Until retiring in 1992, Dr Phizackerley, an Oxford University academic, lived with his wife in accommodation provided by Balliol College. They then bought a house for £150,000 as joint tenants. Apparently Mrs Phizackerley had not worked since their marriage and made no financial contribution to the purchase price.
In 1996, some financial planning took place. The house was put into a beneficial tenancy in common in equal shares. Almost immediately afterwards the couple made wills. Probably both included discretionary
