Trusts and Estates

It is a fundamental principle of trust law that the beneficiaries of a settlement do not enjoy outright ownership of assets held by the trustees. The only entitlement of a particular beneficiary is that specified in the trust instrument. If the..

The possibility that a disappointed beneficiary, who receives less than he or she hoped for from a testator’s estate, will sue the draftsman of the Will is doubtless an unwelcome pressure on many readers. Will draftsmen must act with reasonable despatch when the instructions have been given to them (White v Jones 1999 1AER 691), ensure that any gift of an interest in jointly owned property will be effective, by severing any joint tenancy (Carr-Glynne v Frearsons 1998 4AER 225) and of course ensure that the Will is duly executed (Ross v Caunters 1979 3AER 580, Esterhuizen v Allied Dunbar 1998 2FLR 668).

The decision of the Court of Appeal in CIR v Eversden 2003 EWCA Civ 668 (noted in From The Courts on p4) has been keenly awaited. In the event, the Court of Appeal merely considered one narrow point on the basis of which the Court disallowed the Revenue appeal. The final decision therefore merely confirms the conclusion of the Special Commissioners, and the High Court. In argument before the Court of Appeal, Counsel for the Revenue suggested that a decision in favour of the taxpayer would lead to widespread tax avoidance, as the result of the legislation governing gifts made with a reservation of benefit being circumvented. The Court was unsympathetic, Carnwath LJ suggesting that the Revenue should look to the legislature rather than the Court, for a remedy if one was needed. The Eversden case has received press coverage, and no doubt the Revenue view that a tax avoidance opportunity has opened up will also receive publicity.