5 May 2026
Coventry based accountancy firm Spencer Gardner Dickins (SGD) is urging individuals to take greater care when making regular gifts, after a recent tribunal ruling showed even substantial donations can still lead to an unexpected Inheritance Tax (IHT) bill.
The ruling in Hosking v HMRC saw businessman Jeremy Hosking hit with a £349,309 IHT charge on a series of political donations, despite having given away tens of millions of pounds over a number of years.
Matt Stamback, Private Client Tax Director at SGD, said the outcome highlights a common misunderstanding around gifting.
“There is something quietly tragic about a man who gives away £47.5 million to good causes and still ends up with a tax bill.
“The First-tier Tribunal’s decision in the Hosking case is a masterclass in how to lose a perfectly winnable Inheritance Tax appeal through casual record keeping and the mistaken belief that being a generous person is legally the same as being a systematic one.”
Between 2011 and 2016, Mr Hosking made a series of donations totalling more than £1.7 million to organisations campaigning for Brexit.
While it was accepted that he had sufficient income to make the gifts without affecting his lifestyle, the case turned on whether those payments could be classed as “normal expenditure out of income” under the Inheritance Tax Act 1984.
This classification is determined by whether expenditure accords with a settled pattern and will be judged on whether expenditure over time creates a pattern or if a firm resolution was made and followed.
Matt observed that “Mr Hosking tried both routes and succeeded at neither.
“The gifts were not viewed as a commitment as Mr Hosking could not say when he made any decision, whether it was communicated to anyone, or what its terms were.
“He provided no documentary evidence, no deed of covenant, no letter of intent and no email setting out a plan.
“The other fatal blow was that the gifts could not be viewed as a pattern because a pattern required predictability.
“Mr Hosking gave when asked, often gave the amount he was asked for, attended charity functions and donated while there and could not explain why he chose any particular amount on any particular occasion.”
Due to a lack of resolution or pattern, the gifts could not reasonably be considered “normal expenditure out of income.”
In an attempt to challenge the ruling, Mr Hosking argued that he was being targeted on the grounds of political opinion.
The point of contention was in reference to Section 24, which exempts gifts to qualifying political parties such as the Conservatives, but not to referendum campaign groups.
Clearly disagreeing with Mr Hosking’s argument, the Tribunal observed that Section 24 applies to all political parties and only discriminates between donations to qualifying parties and donations to non-party organisations, rather than based on the donor’s political opinion.
Of the case, Matt said “Three classic mistakes were made by Mr Hosking.
“He kept no records, made an assumption about what creates a pattern and chased a creative discrimination argument instead of fixing the basic problem with his Section 21 claim.”
SGD now warn others that, if you want your gifts to escape IHT, do not rely on your good character and vague memory.
HMRC is not impressed by a big heart alone. It wants to see the paperwork.
For support with Inheritance Tax obligations, contact Spencer Gardner Dickens on 0247 625 7481.