Mrs Bower, who was over 90 at the time of her death, died five months after making a gift to her Axa discounted gift trust.
Key to the case was the age of the settlor at the point she made the gift to the trust.
HMRC argued persons aged 90 or over would receive little or no discount since they would be uninsurable. But the executors of nonagenarian Mrs Bower disagreed, saying a discount should apply.
The Special Commissioner decided partly in the favour of the executors and set an adjusted discount figure.
But the Revenue now says it will appeal the decision and says any open cases already being considered will remain under review. It will continue dealing with any new cases, but will not press for payment of additional inheritance tax prior to the outcome of the current litigation.
Standard Life head of estate planning Julie Hutchison says: “Whilst the executors of the late Mrs Bower are, I suspect, disappointed that HMRC has appealed the decision, the final outcome once all steps are heard will bring clarity one way or the other for advisers and their clients on whether settlors over the age of 90 should receive a discount.
“Solicitors dealing with estates where the client had a discounted gift trust and was over age 90 at set-up can refer to new guidance just posted onto the HMRC website. This holding statement (Revenue & Customs briefing 23/08) sets out the approach HMRC plan to take to cases which are new and pending. I welcome the statement that HMRC will not press for payment of additional IHT pending final resolution of the Bower case”.