inheritance

Grandmother evicted after giving £1.4m home to daughter for ‘inheritance tax reasons’

An 82-year-old grandmother has been evicted from her home after losing a court battle with her daughter whom she had given the home to for “inheritance tax reasons”.

Norma Gibbons and her daughter Dawn Gibbons, 52, lived together in upstairs and downstairs converted flats in Norma’s £1.4 million home of 40 years in Earlsfield, south west London.

The Central London County Court heard Norma had willingly transferred the freehold of the entire building, including her upstairs flat worth £600,000, into Dawn’s name in 2004 as a gift to avoid inheritance tax (IHT).

Dawn, who lived in the ground floor flat worth £800,000, is said to have had a good relationship with her mother Norma until 2008, when their relationship broke down over tensions that arose following the birth of Dawn’s child.

Their feud saw Norma make 155 false calls to police making allegations about Dawn, as well as calls to social services and a “campaign of harassment” upstairs involving loud noises and the deliberate creation of water leaks into the downstairs flat.

When Dawn sought to fix the leaks, Norma would not allow any tradespeople into her flat. Dawn served her mother with court orders which were subsequently torn up and thrown into the garden, the court heard.

This led to the case going before Judge Alan Johns KC at the county court in 2022 where her mother claimed she had been “tricked” into making the gift in 2004 – a claim rejected by Johns J.

Nonetheless, Norma continued to prevent tradespeople entering her flat, and subsequently Dawn sought to have Norma evicted in November last year.

The case came before Judge Nigel Gerald. Lara Simak, representing Norma, said she wouldn’t have made the transfer if she knew of the possibility of an eviction, and that she had an “expectation to live there for the rest of her life” which must have formed part of any transfer agreement. “Certainly, she didn’t expect to be kicked out of her flat by her daughter, otherwise she wouldn’t have transferred it,” said Simak.

Gerald J rejected this defence, suggesting that a claim that there was an agreement she could stay for life and a claim that she was “tricked” are incompatible. He added any hope she could avoid eviction based on this defence “[existed only] on cloud nine, not on Planet Earth”.

Granting Dawn’s request for her mother to be evicted, Gerald J said:

“On 12th May 2022, Judge Johns determined that the flat had been gifted by mother to daughter on 19th August 2004 with the aid of a solicitor and without daughter even knowing about it.

From that, it will follow that it was an outright gift. It would appear that that was part of some sort of tax planning.

It would also follow that mother was a bare licensee of the flat, so that following the daughter’s 20th November 2022 notice terminating the licence as of 5th December, mother was obligated to vacate possession of the flat.

Dawn told me that whilst she is unhappy about all the alleged harassing behaviour of her mother, it is not something she requires a determination of this court on.

She therefore before me simply asks for an order that her mother give possession of the property forthwith.

It would perhaps seem to an observer somewhat astonishing for a daughter to seek possession from a mother in her 80s – that is essentially a moral judgment and observation.

But if anybody were to look at the extent of the allegations by the mother against the daughter and that the daughter has been the subject of multiple harassment issues, an observer might reach the conclusion that she had been pushed to her limit.

I will order that the defendant give possession to the claimant forthwith. Hopefully, this will bring matters to an end.”

Norma was also ordered to pay £10,000 costs.

Tanya Lloyd, Senior Associate at Wedlake Bell, commented:

“Individuals should not be lured into a false sense of security that simply transferring an asset to a family member is sufficient. Professional advice should always be sought. This case demonstrates that transferring the property was the easy part. There are other legal and tax considerations, as well as family considerations, which Mrs Gibbons doesn’t appear to have been properly advised on and which meant that once the relationship broke down the whole arrangement failed.

The aim by individuals to reduce their inheritance tax bill should not cloud other potential consequences of this type of planning that, unfortunately, as professionals we see often. In this case, it was a breakdown of relationship, but bankruptcy, divorce and loss of mental capacity can have unexpected consequences in these types of cases.

This case highlights the risks that can arise with transferring property to a loved one.”

6 Responses

  1. I feel the judge in this case is more interested in punish this old foe for saving the tax bill then taking a moral consideration, as in most situations, for the poor old soul.

  2. The inheritance tax should be totally scraped off as the the money is already taxed on the salary. the mortgage payment for 25 or 30 years is already taxed ! Why again your children have to pay the taxes these so call laws are only sucking the money out of the individual in an legal way especially now so much of financial problems

  3. I don’t think the daughter is being fair with the mother, why can’t she be made to pay for her mother’s upkeep & abode until death.

  4. Horrible treatment of her own mother. Whoever helped draft the transfer should have given the mother lifetime rights to live in the property.

Read more stories

Join nearly 5,000 other practitioners – sign up to our free newsletter

You’ll receive the latest updates, analysis, and best practice straight to your inbox.

Features