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Trusts and Estates Law and Tax Journal: April 2013

The idea of shifting tax upon death from the estate to the recipient is a thought-provoking one. Geoffrey Shindler weighs it up

None of us needs reminding that we are nearly two years away from the next general election and we need to be reminded even less that we will be plagued with politicians wanting our vote, electoral pundits telling us what is going to happen and why, and all the important matters in the newspapers and on television relegated to somewhere below the latest opinion poll. There is an argument for booking your holiday now and fleeing the country from March to June 2015.

IBM United Kingdom Pensions Trust Ltd v IBM United Kingdom Holdings Ltd updates the position on rectification and pension trusts. Emily Campbell looks at the implications

The area of rectification is a fertile source of case law. In the context of wills and trusts, many of the cases on rectification are found in the area of pension scheme trusts. The reason for this is that pension scheme trust deeds are hugely complex documents and the scope for making drafting errors is therefore very substantial. Those who advise in the area may look at a subtle error that has crept into a 150-page ‘Definitive Deed and Rules’ and feel great sympathy for the draftsman, who had in some respects taken on the task of Hercules. Further, the types of error which are encountered typically create seven-figure sums worth of additional funding liabilities for the employer.

Christopher Lloyd examines the current approach of the court to proprietary estoppel as indicated in Bradbury v Taylor

The inexorable rise in real property prices over the last half-century means that a testator’s home is nearly always the most valuable asset in their estate. As a result, the question of ‘who gets the house?’ has become highly emotive, not only because it involves inheritance of the family home, but because it can represent a wildly unequal financial settlement. It is therefore unsurprising that testators will occasionally make promises or representations during their lifetime about who is to inherit their house. The effect of those promises – often made with the best of intentions – can have a significant impact on the effect of a testator’s will.

The Charity Commission’s decision over a proposed cy-près scheme for The Sir Edward Heath Charitable Foundation has useful lessons, as Sarah Clune explains

In September 2011, a decision of the Charity Commission reviewer was published in relation to The Sir Edward Heath Charitable Foundation (the Foundation). This article examines the background to an application by the trustees of the Foundation for a scheme from the Charity Commission (CC), the preparation of a draft scheme by the CC, the reasons for intervention by a reviewer and the latest developments in relation to the Foundation.

Jehan-Philippe Wood analyses Bieber v Teathers, which sheds new light on how a Quistclose trust is defined in the context of partnerships

A Quistclose trust (the name derives from Barclays Bank vQuistclose [1968]) is a form of resulting trust that arises by operation of law. In broad terms, it arises when A pays or transfers money or property to B so that B holds the money or property in trust for A, subject to a power to apply it exclusively for a stated purpose. B has legal title to the money or property and power to apply it for the stated purpose. A retains a beneficial interest in the money or property unless and until it is so applied.

Re Harcourt is a useful reminder of the circumstances in which the court can revoke a lasting power of attorney. Catherine Paget reviews the case

In this important case, decided on 31 July 2012, Senior Judge Lush determined whether a lasting power of attorney (LPA) should be revoked by the Court of Protection, and a property and affairs deputy appointed for Mrs Harcourt. The application was made by the Office of the Public Guardian (OPG). The case considers the powers of the OPG and the Court of Protection when an attorney impedes an investigation and the circumstances in which the court can revoke an LPA. In reaching his decision, Senior Judge Lush gave due consideration to the ‘best interests’ checklist set out at s4 of the Mental Capacity Act and Mrs Harcourt’s rights under Article 8 of the Human Rights Act 1998, s3(1).

Mark Stevens discusses Curati v Perdoni, which underscores the importance of knowing all the circumstances of your client when will-drafting

The two main issues at the centre of Curati v Perdoni [2013] were domicile and revocation. Many will be familiar with the concept of domicile, but before looking at the facts of the case it is worth setting out the law.

Mark Pawlowski considers the Court of Appeal’s decision in Pankhania v Chandegra, which discusses whether express declarations of trust are conclusive

It is accepted as established law that, where the parties execute a trust expressly declaring their respective beneficial interests in property, this will be conclusive of the parties’ common intention as at the time of the declaration in the absence of fraud, misrepresentation, undue influence or mistake permitting a party to rescind or rectify the trust: see, for example, Wilson v Wilson [1969], where the declaration of trust was rectified on grounds of mistake. In most cases, therefore, this means that the size of the parties’ respective shares upon acquisition will be determined according to the terms of their express trust regardless of their actual contributions to the purchase of the property.