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Last updateTue, 24 Feb 2015 5pm

Simrun Garcha reports on the charitable status and disposal of assets of a now defunct religious sect

The High Court’s recent decision in Buckley v Barlow [2016] explored whether the assets of a religious organisation that had ceased to function by the middle of the 20th century should be applied in accordance with a cy-pres scheme for general charitable purposes or be treated as bona vacantia.

Steve Appleton and Joshua Eaton outline HMRC’s new approach to trusts and the taxation of index-linked loans

Before the introduction of the transferable nil rate band (TNRB) on 9 October 2007, the nil rate band discretionary trust (NRBDT) was a common tool used by solicitors to ensure that spouses took full advantage of both of their nil rate bands (NRB). It worked by the first spouse to die making a gift (the gift) of their available NRB allowance to the trustees of a discretionary trust which included the survivor amongst the class of discretionary beneficiaries. The trust assets would then usually pass to the intended beneficiaries on the death of the survivor. The survivor would still have their own NRB available to set against their free estate. As such, both NRBs were utilised.

Fiona Campbell-White and Henrietta Watson discuss the current approach of the courts to the construction and rectification of wills

The recent case of Slattery & Jagger v Jagger [2015] and subsequent cases reveals the court’s current approach to the construction and rectification of wills.

The Cayman Court has provided clarity over what happens in the event of absent or defective protector consent. Robert Lindley explains

Any trustee should have cause for concern upon realising that in the exercise of its powers and duties the appropriate consents had not been obtained, or were defective, thus jeopardising the validity of the trust’s administration, particularly if the absent or defective consent has remained undetected for a significant period of time. As a cautionary tale for trustees and practitioners such a set of circumstances were considered by the Grand Court of the Cayman Islands (the ‘Cayman Court’) in the case of the Y Trust No 1 (2016) which illustrates various ways in which the problem of absent or defective protector consent may be overcome, and the factors relevant to obtaining the Cayman Court’s approval to the appointment of private trust companies in place of individual trustees.

Mark Pawlowski considers the case for accepting backwards tracing as part of English law

In Bishopsgate Investment Management Ltd (in liquidation) v Homan [1994], the Court of Appeal held that the equitable remedy of tracing did not extend to tracing through an overdrawn bank account, whether it was already overdrawn at the time the relevant money was paid into it or which was then in credit but subsequently became overdrawn by subsequent drawings.

The courts will sometimes give effect to oral agreements for the transfer of land. David Sawtell examines recent case law

In order to be enforceable, an agreement for the conveyance of land typically has to be in writing and must satisfy certain formalities. This discipline protects trustees from uncertainties about the ownership of land. In some circumstances, however, the court will give effect to an oral agreement for the transfer of land even though it is otherwise unenforceable for want of these formalities by imposing a constructive trust or finding that there is a proprietary estoppel. In Dowding v Matchmove [2016], the Court of Appeal upheld such an agreement and imposed a constructive trust, even though the parties were aware that, in due course, contracts would have to be exchanged to complete the conveyance. The concern for trustees is whether an oral representation could affect the ownership of beneficial interests in the land, potentially putting them in breach of trust or, at the very least, exposing the trust to expensive and uncertain litigation. In fact, the courts have stepped in to afford some protection to trusts from the informal creation of rights in land, giving greater prominence to the unanimity principle. Matchmove shows, however, that the legal owners of land should be careful so as not to hide behind the need for written formalities in the transfer of land, as the courts may be willing to step in to prevent unconscionability.

Keith Wallace makes the case for using a trust corporation

UK trusts are said to number 170,000, according to gossip around the register of trusts being compiled by HMRC. Most of these will be modest, static and uncomplicated; for the rest, life is going to become, operationally speaking, much harder.

Geoffrey Shindler reflects on changing practices and definitions in tax law

It is now that time of the year. We can put away our cares and troubles and depart for, at least in our own view, a well-earned break.

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