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Trusts and Estates Law and Tax Journal: December 2011

Williams v Lawrence exposes the effect of insolvency on a disposal of the deceased’s property made years before the estate was made bankrupt, as Lexa Hilliard QC discusses

It is fairly rare that the estates of deceased individuals and insolvency collide, but when they do the results are often unhappy and unexpected for the deceased’s family. In the recent case of Williams v Lawrence [2011] the interest of the deceased in a substantial property was the subject of a successful claim by the trustee in bankruptcy of the deceased’s estate some 16 years after he had died.


Ian Burman discusses new HMRC guidance on the ownership of joint assets

While it is extremely unlikely that the happy couple will have HMRC in mind when they pledge a life together ‘for richer, for poorer’, they may certainly be poorer if they do not give some thought to the ownership of their joint assets, particularly if they expect to structure their ownership to maximise the opportunities available to a spouse or civil partner paying income tax at a rate lower than the other.

Paul Whitehead compares current attitudes towards trusts around the world

Trusts are incredibly versatile, flexible and appropriate wealth-holding vehicles that have existed for many hundreds of years. Over the last few years they have been subjected to unprecedented attack, primarily by various fiscal authorities who seem intent on damaging and limiting the use of trusts, the effects of which, in many cases, go well beyond fiscal neutrality and fail to recognise the very valid reasons why trusts are and have been used and the advantages they provide. 

Green v Montagu shows that the question of legitimacy may still arise in cases of long-standing family trusts, as Thomas Dumont and William Moffatt delineate

The Montagus are one of the great families of England. They descend from a 16th century judge who was Lord Chief Justice of both the King’s Bench and then the Common Pleas. A remarkable three dukedoms have appeared in the family tree: Montagu, Buccleuch and Manchester. The dukedom of Montagu became extinct not once, but twice in the 1700s. Buccleuch flourishes, with the largest landed estates in private hands. The Dukes of Manchester, however, have recently appeared almost as often in the criminal courts as the Chancery Division. Their great estates have dwindled, their castles are gone. This year, in Green & anor v Montagu & ors [2011], Mr Justice Floyd had to consider whether the trustees of the 10th Duke’s settled estates could benefit the children of the 13th Duke, even though the 13th Duke was not validly married to their mother when they were born.

Peter Nellist gives the lowdown on the most tax-efficient ways of dealing with chattels

The Antiques Trade Gazette usually has a good array of reports on items that have sold for significantly more than their anticipated value, often called ‘sleepers’. A recent ATG issue highlighted a wooden shield from Papua New Guinea estimated at between £50 and £100 selling for £7,000 plus premium. The following week there was a report of three wine glasses bought for 40p each at a car boot sale being sold for £16,000 plus 15% premium. An Indian 18th century stone rectangular plaque unsold in a previous sale by London auctioneers had an estimate of between £300 and £500. The ATG went on to write ‘At that here to sell (sic) figure the market certainly responded, but the auctioneers admitted they didn’t know precisely why the UK dealer who bought it was pushed to a bid of £16,000’. 

Forsters LLP

Whaley v Whaley poses the question of when a trust fund is a ‘resource’ in divorce proceedings, as Emily Exton explains

The divorce case of Whaley v Whaley [2011] is a stark example of the application of well-established principles in the family courts concerning the treatment of a trust fund as a resource to which one of the parties has access. While no new law was formulated, the case serves as a vital object lesson in the importance of trustees taking a considered and careful stance within the proceedings, and appropriate legal advice at the earliest opportunity. 

Morris v Davies is a reminder of the rules governing probate, domicile and anti-suit injunctions, as Edward Rowntree sets out

As with so many cases that appear in the corridors of the Thomas More Building or on newspaper pages (both broadsheet and red top), this case arose out of and continues from a spectacular family fallout.

Lucy Whitehouse looks at a Canadian residence case that highlights the danger of the persuasive beneficiary 

In Canada, as in England, the concept of residence forms one of the bases of a person’s liability for tax. Determining residence is not always straightforward; it is a question of fact, entailing the consideration of various factors that point towards, or away from, social and economic links with the country.