Last updateTue, 24 Feb 2015 5pm

Trusts and Estates Law and Tax Journal: January/February 2012

Geoffrey Shindler looks ahead to divine what regulators might have in store for wills and estate administration

Happy New Year and here we are again. Is it a case of ‘plus ça change’? Well as ever to all good questions the answer is both ‘yes’ and ‘no’, no because the world has changed and its because Lancashire County Cricket Club managed to win the Cricket County Championship for the first time since 1934, no doubt entirely due to the fact that I was on my knees praying for most of the summer and not writing articles for this journal.


George Hodgson sets out the current position of FATF on trusts

On trusts, FW Maitland said, ‘If we were asked what is the greatest and most distinctive achievement performed by Englishmen in the field of jurisprudence I cannot think that we should have any better answer to give than this, namely the development from century to century of the trust idea’ Maitland, Selected Essays (1936) p129. There is little doubt, however, that they are widely viewed with suspicion by those who do not come from a common law background. In an era where transparency is generally seen to be an obvious ‘good thing’, trusts are criticised by many, especially those from civil law jurisdictions, as opaque and therefore almost certainly a ‘bad thing’.

Gill Steel examines pension by-pass trusts

Many clients have pension arrangements that provide death benefits. These clients may be thinking of using a pilot discretionary trust, created during their lifetime, to receive their pension death benefits often referred to as a ‘pension by-pass trust’ or a ‘spousal by-pass trust’. The recent changes to the perpetuity rule in the Perpetuities and Accumulations Act 2009 (P & AA 2009) have caused some complications, which, together with developments in the tax treatment of pension benefits, should cause practitioners to review their approach to by-pass trusts.


Tim Fullerlove gives trusts and estates practitioners an update on the remittance basis for non-doms

The ‘remittance basis’ may be relevant for any non-domiciled, UK-resident individual client. Taxpayers who choose to enter the regime pay full UK income tax and CGT on income and gains that are made or earned in the UK, but will only pay UK tax on foreign income and gains if they are brought into the UK (remitted). Details of what constitutes a remittance are beyond the scope of this article but, broadly, funds can be remitted simply by transferring them to a UK account, or by using them to purchase goods or services in the UK. The price of the regime is the £30,000 remittance charge (due to increase to £50,000 from April 2012 for individuals who have been UK-resident for at least 12 years) and the loss of personal allowances and the annual exempt amount for CGT.

Chris Walton explains why a review of online assets is an essential part of the will-making process

Just ten years ago, the way in which we used the internet was very different. We may have used it for research, or sent a couple of emails a day, but only a few of us would post videos, play games, blog or shop online. Over the past decade, the numbers of people using the internet in these new, complex ways has increased at a phenomenal rate.

Morley-Clarke v Brooks & ors elucidates the court’s approach to the capitalisation of a life interest under an intestacy after the time limit has expired, as Fenner Moeran outlines

The case of Morley-Clarke v Brooks & ors [2011] is that rare creature, a decision of a Master deemed worthy of reporting. The reason is that it deals with a topic that does not appear to have any reported authority on it, namely the exercise of the court’s discretion to allow a widow(er) to capitalise her or his life interest under an intestacy more than 12 months after letters of administration have been issued.

In the first of two articles, Sukhninder Panesar discusses different approaches to equitable tracing in light of the Court of Appeal decision in Sinclair

One of the long disputed questions in English law is the extent to which a claimant, who wishes to take advantage of the equitable tracing rules, needs first to establish a proprietary connection between the property being traced and their own original property. Put in a different way, can a claimant trace property that a fiduciary, such as a trustee, has in their control but that has not been acquired by the misuse of the principal’s or beneficiary’s own property?

Judith Morris compares the approach of the Jersey court in Re BB, A and C with that of the English court in Jasmine Trustees Ltd v Wells Hind

It is perhaps to be expected that it is only recently, as the offshore centres mature as trust jurisdictions, that the Jersey Royal Court has opined on its degree of willingness to exercise its discretion to ratify the past actions of invalidly appointed trustees in Re BB, A and C [2011]. It is more surprising that in England and Wales, with a great history of trust law stretching back into the 19th century and beyond, the principal authority on defective appointments of trustees should be the relatively recent decision of Mr Justice Mann in Jasmine Trustees Ltd v Wells Hind [2007]). For those practising in England and Wales the two cases may seem to offer a slightly depressing comparison, in the same way as do the contrasting decisions of the Court of Appeal in Pitt & anor v Holt & anor ( with Futter & anor v Futter & ors ) [2011] on the one hand, and the more generous approach taken by the Royal Court in Jersey in Re R and the S Trust [2011] on the other.