Summary: The court construed the Inheritance Tax Act 1984 s.28, which was of central importance to the structure of employee benefit trusts and to the likelihood of such trusts delivering purported tax advantages. A solicitor retained to give specialist tax advice had been negligent in recommending such a trust to his client without warning him of the specific and significant risk of HMRC construing the provision in a contrary way that would cause the trust to be fiscally ineffective. The court outlined general principles concerning the standard of care applicable where a solicitor’s advice turned on his interpretation of legislation.
Stephen Hackett (instructed by Griffin Law Ltd) for the Respondent
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