In Jonathan Wood v HMRC [2026] TC09849, the First Tier Tribunal (FTT) found that payments made to various Brexit leave campaigns were intended to confer a gratuitous benefit and were therefore 'transfers of value' for Inheritance Tax (IHT) purposes.
Mr Wood made payments totalling £747,500 to various political 'leave' campaigns over a period of eight years. HMRC raised a determination deeming the payments 'Transfers of value' and charged Mr Wood Inheritance Tax (HT) on them. A ‘transfer of value’ is a disposition made by an individual which results in the value of their estate, i.e. their assets chargeable to IHT, being reduced.
- Mr Wood was a successful trader and hedge fund manager.
- He had a long-standing interest in UK politics, particularly in the UK's relationship with the EU.
- All the donations made came from Surplus income after maintaining his normal level of living.
- Mr Wood decided how much to donate and to whom, depending on the project he was supporting and how much was needed at that specific time.
- When he donated to leave campaigns, he did so as he believed in the cause and believed they would do a good job.
- The campaigns that Mr Wood donated to were led by Lord Elliot, whom Mr Wood considered honest and very intelligent, as well as good at running the campaigns he was involved in.
- No commitment or prior arrangement had been put in place to make the payments.
- Mr Wood believed the payments fell within s.10(1) IHTA 1984 as they were made at arm's length to unconnected persons, and he did not intend to confer any gratuitous benefit from making payments.
- Mr Wood believed the payments were not transfers of value for IHT purposes as he was not giving away a free benefit or advantage to someone.
- Mr Wood claimed he was given the opportunity to shape the campaigns because he was more likely to be listened to.
- He also believed the payment fell within s.21 IHTA 1984, as they were part of his normal expenditure and made from surplus income.
- After the determination was raised, a further three payments were disclosed by Mr Wood, the varied assessment totalled IHT due of 'not less than £99,629'.
- Mr Wood appealed to the First Tier Tribunal (FTT).
The FTT found, with regard to s.10(1) IHTA 1984:
- There was no evidence to suggest Mr Wood received any legally enforceable rights from making the payments, nor did he receive any goods or services as a result of the payments.
- Mr Wood expected that he would be listened to and gain some influence over the campaigns; however, he was not under the illusion that the payments bought him an enforceable right.
- Mr Wood suggested that if he was not happy, he would ask for his money back, but he did not have any belief that he had the right to ask for his money back.
- Mr Wood's intention of making payments to achieve a successful Brexit outcome, for him to benefit financially, was not an intention in the context of s.10(1) because it was wholly beyond his control.
- Mr Wood's, therefore, intended, both subjectively and objectively, to confer gratuitous rights on the recipient.
Regarding s.21 IHTA 1984:
- Case law in Bennett & Others v IRC [1995] STC 54 was relied upon to determine whether the payments were made as part of Mr Wood's 'normal expenditure'.
- The gifts must have accorded with a 'settled pattern of expenditure'.
- A settled pattern is established in two ways:
- There is no fixed minimum period for the gifts to be ‘normal'.
- The pattern must have been ‘intended to remain in place for more than a nominal period and indeed for a sufficient period in order for the payment to be regarded as a regular feature of the transferor's annual expenditure’.
- It is not necessary that the amount of gifts be fixed.
- The recipient of the gift does not need to be the same.
- There was no regularity established for the payments; each payment varied. There were varying gaps from almost five years to six days.
- No significant pattern could be established; he simply made significant donations over many years as and when there was a need.
- Although there was a link of predictability, there was no pattern.
- The payments, therefore, did not form part of Mr Wood's normal expenditure.
The appeal was dismissed.
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