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May 2012: Trusts and Estates Law and Tax Journal
Martyn Frost

The consequences of omitting key questions when taking will instructions are clear in Robinson, as Martyn Frost reports

The recent Canadian case Robinson Estate v Robinson [2011] deals with a problem that is not uncommon in this country: the possibly inadvertent revocation of a previous foreign will by a later will. It highlights several issues about the interaction of two wills and the way that instructions are taken.

Appleby

John Rimmer summarises Harper v Simpson, which sheds light on whether the Duomatic principle applies to beneficial shareholders

Every law student learns that a company is a separate legal person from its members and that the management of the company is carried on by the directors. Yet the voting members of a company can make a decision binding on the company, as they might have had they held a general meeting. In Re Duomatic Ltd [1969], it was held that, where all the shareholders who have a right to attend and vote at a general meeting of a company agree to a decision in a shareholders’ agreement that could be carried into effect at a general meeting of the company, that concurrence is as binding as a resolution at a general meeting. In Duomatic, the English Court of Appeal held that it did not matter whether the formal procedures for agreeing on a particular matter were stipulated in the Articles of Association, in the Companies Act 1985 or in a separate contract between the members of the company concerned. What mattered was that all the members, who ultimately exercised power over the affairs of the company through their right to attend and vote at a general meeting, had agreed on that matter. It was decided that, in Duomatic, as long as the members had previously reached an agreement, they were unable to purport that they were not bound by a particular matter simply because the formal procedure for approving it was not followed.

Peter Nellist outlines ten steps to securing the IHT income exemption

It can be difficult to obtain acceptance by HMRC that a gift from a taxpayer’s income is covered by the IHT gift out of income exemption (s21 IHTA 1984). Problems usually appear after the taxpayer’s death when it is too late to take any meaningful action to improve the position and with personal representatives being left to look for more evidence that often is not available.

The conduct of Hamar at tribunal reveals valuable points of practice, as John Barnett explains

Like many tax advisers, I have taken cases to tribunal only rarely, having had one case – Corbally-Stourton v HMRC [2008] – before the Special Commissioners and now one – Hamar v HMRC [2012] – before the First-Tier Tax Tribunal. This article reflects on Hamar.

In the first of two articles, Catherine Paget outlines the result of the Law Commission’s consultation on intestacy and family provision claims on death, focusing on intestacy

The Law Commission Report on Intestacy and Family Provision Claims on Death was published on 13 December 2011. The Law Commission had started work on a review of the law relating to intestacy and family provision in 2008. The report begins by addressing the background to the Law Commission’s work in this area of the law. It sets out the current law of intestacy and family provision and goes on to summarise the recommendations that are made in respect of these areas. The commission also presented two draft bills that would enable those recommendations to be implemented. This article presents an overview of the recommendations for change made by the commission in the area of intestacy.

Richard Frimston and Beth Norton clarify the position on double taxation following the EU’s recent communication

Clients with cross-border issues are increasingly common. This can lead to difficulties in relation to the payment of inheritance or estate taxes following a death, with tax often being payable in more than one state. On 15 December 2011 the European Commission published a communication entitled ‘Tackling cross-border inheritance tax obstacles within the EU’ in an attempt to address this issue within the European Union member states. This was accompanied by a Commission recommendation and a Commission staff working paper. The communication and accompanying documents have potentially wide-reaching consequences for trust and estates practitioners in the UK. Some of the likely issues that will arise are highlighted below.

DWF

Geoffrey Shindler finds the trials of an over-complex tax system a worldwide phenomenon

In March of this year I attended the STEP conference in New York, and a most enlightening conference it was too. I had not been to the Big Apple for some years so it was nice to see capitalism in the raw still thriving. In particular I noticed that the hallowed tradition of tipping everyone had not lost its edge. Everyone in the suitcase food chain from airport porter through taxi driver to bellboy and hotel suitcase delivery person had their physical and metaphorical hand out for a few dollars here or there. I suppose it is my grumpy and North Country meanness that makes me wonder why that particular tradition holds so strong in the US. Do they not pay their staff enough? Is it some part of the American dream? I did not notice that part of the dream in anything that Arthur Miller wrote.

Lyndsey West and James Lister revisit cohabitants’ property interests on separation in the Supreme Court decision in Jones v Kernott

The Supreme Court decision in Jones v Kernott [2012] has again highlighted the difficulties of ascertaining the respective beneficial entitlements of unmarried partners in a home that they have purchased together. When married couples divorce the Matrimonial Causes Act 1973 provides a framework for the division of their property, including the matrimonial home. There is similar provision in relation to civil partnerships. Unfortunately, as yet there is no corresponding statutory framework to deal with the situation when unmarried partners go their separate ways. Parliament’s failure to legislate in this area has been widely criticised, including by Lords Wilson and Kerr in their judgments in Jones. The problem is particularly acute if (as will often be the case) the parties have not expressly agreed their respective beneficial interests and there is no evidence of their intentions in this regard. With increased home ownership, house price inflation over recent decades and lengthier periods of cohabitation, these difficulties are likely to recur.