Mon06262017

Last updateTue, 24 Feb 2015 5pm

William Batstone examines the Court of Appeal decision in Davies v Davies [2016]

Tegwyn and Mary Davies have farmed in West Carmarthenshire since 1961 and they continue to do so now in their mid-seventies. They have three daughters: Enfys, Eirian and Eleri; and by the time Eirian was 17 it had become clear that she was the only one interested in taking over the farm. The press coverage of the case described her as the ‘Cowshed Cinderella’ because in court she said that she missed out on Young Farmers’ Club dances with her sisters because she had to muck out and do other chores on the farm. It was Eirian’s case that she undertook long hours of such work for low or no pay because of what her parents had told her about her succeeding to the farm. Eirian is an accomplished stockwoman whose hard work and passionate dedication helped her parents produce what Floyd LJ described in Davies v Davies [2014] at [59] as ‘a prodigious Holstein pedigree milking herd and a highly successful business’. That earlier decision of the Court of Appeal dismissed the appeal by Tegwyn and Mary against the finding of HHJ Jarman QC in Davies v Davies [2013] that Eirian had raised an equity against her parents by virtue of the principles of proprietary estoppel. The parties were unable to fulfil the hope expressed by Floyd LJ at [59]:

A recent case highlights the importance of meticulous implementation when tax planning. Emma Pearce explains

This article discusses the First-tier Tribunal’s (FTT) decision in Trustees of the Morrison 2002 Maintenance Trust v HMRC [2016].

Alexander Drapkin discusses a recent case which indicates the factors the court takes into account in a dispute over where a body should be buried

The case of Anstey v Mundle [2016] concerned a dispute between one of Mr Carty’s daughters, Valerie, and on the other side another of Mr Carty’s daughters, Sonia, and one of his nieces, Cynthia. Mr Carty had died and the parties could not agree about how to dispose of his body. Valerie contended that Mr Carty’s body should be buried in England and the defendants argued that his body should be transported to Jamaica and interred there beside his mother.

There is a difference between privacy and secrecy. Geoffrey Shindler considers common terms used by politicians and the press about the trust industry

It would be flying in the face of the obvious to suggest that at the moment the trust industry does not have problems. It has had problems before and overcome them, so there is no reason for panic, but there is very much a reason for deciding on a strategic approach to the problems that we now have. Those of a historical bent will remember that in the time of Henry VIII he was not only trying to find a wife who would bear him a son but he was also desperately short of money and decided that the sixteenth century trust industry had too many tax loopholes. Sound familiar?

Mark Pawlowski discusses the case law on testamentary trusts for useless or capricious purposes

The notion that a trust may fail because it serves no useful purpose or reflects merely the whim or fancy of the testator seems to fly in the face of testamentary freedom and, in particular, the testator’s right to dispose of their estate in whatever manner they choose, subject only to the court’s control over illegal or immoral conditions and the making of reasonable financial provision for their family and dependants. So how have the courts grappled with these two competing aspects of public policy?

John Dickinson and Natasha Dzameh look at the circumstances in which a disposition to an executor constitutes an absolute gift

Practitioners contending with wills and probate matters are fully aware of the distinct difficulties involved in drafting a will which not only ensures that the testator’s estate is disposed of in accordance with their wishes, but is also incapable of being contested. Nonetheless, in recent years it has become increasingly common for individuals to avoid engaging the services of a legal professional for the drafting of such an important document and instead to trust a homemade or internet-inspired document to dispose of their estate. The availability of online templates and general information on will drafting is such that laypersons mistakenly believe that they are capable of drafting a will with the requisite care and skill required to ensure that their estate will pass safely to their intended beneficiaries.

Scott Allen and Josh Folkard highlight a case brought by disappointed beneficiaries against a financial adviser

In the interesting recent case of Herring v Shorts Financial Services [2016], two disappointed beneficiaries attempted to blame the testatrix’s financial adviser, rather than her solicitor, for the fact that they were short-changed within her will. It was argued first, that the solicitor could off-load some of his will-making responsibility onto the IFA, by relying without further verification on certain information provided by the IFA, and second, that a cause of action could be pursued by the beneficiaries against the IFA. The court rejected both propositions on the facts of the case, but gave an interesting indication that White v Jones [1995] might not be the only route to a cause of action for frustrated beneficiaries.

Claire Randall and Katie Allard outline the tax implications of Bowring v HMRC, which concerned a scheme to reduce CGT on capital payments by a trust

In Bowring v HMRC [2015] the Upper Tribunal found that a scheme designed to reduce capital gains tax due on capital payments by a trust, commonly known as the ‘flip-flop II’, was effective. This case is, of course, of interest to those who implemented flip-flop II schemes before anti-avoidance legislation was introduced to block them in the Finance Act 2003. This type of scheme is no longer effective. However, the judge’s reasoning on the meaning of indirect transfers to beneficiaries under s97(5) of the TCGA 1992 is generally applicable. The judgment therefore provides a useful insight for those involved in tax planning as to how the courts are likely to decide on similar issues in the future. However, before undertaking a more in-depth analysis of the Upper Tier’s decision, it is first useful to set out the main provisions of the legislation and the basis upon which the parties deployed their respective arguments.