Trusts and Estates

A solution to the IHT/CGT dilemma?

Once again, the Special Commissioners have had to adjudicate upon a question of domicile. This time the question was whether the taxpayer, whose domicile of origin was in the UK, had succeeded in establishing a domicile of choice in Hong Kong: Surveyor v CIR Sp C339 (noted 2002 STI 1522).

It is well established that Dependants, when a surviving spouse is proposing to claim provision out of a deceased’s estate under the Inheritance (Provision for Family and Dependents Act 1975) the provision that would have been made in divorce proceedings will be an important factor. The orders made by divorce Courts are, therefore, of some interest. In most cases, the divorce Courts are faced with the difficulty of getting a quart out of a pint-pot trying to make adequate provisions for the support of two persons out of funds which are clearly insufficient for this purpose. However, occasionally the Courts have to adjudicate in cases where one of the parties, at least, may be regarded “super rich”, with more than enough resources to provide for both parties. The Courts have been moving towards a 50/50 approach in these cases, as illustrated by the Court of Appeal decision in Lambert v Lambert 2002 EWCA Civ 1685.

The Lord Chancellor’s Department has issued a consultation paper on the future of “Probate Services”. Essentially, this is about the way in which the Registries will be organised and the issuing of Grants of Representation will be administered. The consultation paper has been issued following a review carried in 2001. The consultation paper acknowledges that, in general, users of the service are well satisfied. It might be thought that there was, therefore, a case for Government to heed the maxim “If it ain’t broke don’t fix it”. Alas, the simple answer does not fit in with the Government’s “modernising” tendencies.