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Trusts and Estates Law and Tax Journal: January/February 2015

Sukhninder Panesar explains the importance of the court’s recent decision in Cotton v Cardigan [2014] to trustees’ powers

The much publicised sale of Tottenham House, Savernake, Wiltshire, has grabbed the attention of both the media and legal commentators. In a decision handed down by the Court of Appeal in Cotton v Lord Cardigan [2014], the court approved the sale of Lord Cardigan’s ancestral home and in doing so revisited the grounds upon which the court would approve the exercise of a trustee’s power to sell in circumstances involving a momentous decision on the part of the trustees. It is trite law that, in the exercise of a trustee’s power or discretion, the trustees can seek the approval of the court, or otherwise obtain the court’s ‘blessing’, thereby protecting themselves from further actions by their beneficiaries. The grounds upon which the court’s assistance can be given were set out by Hart J in Public Trustee v Cooper [2001], discussed below.

Peter Nellist gives the lowdown on the proposed IHT exemption for emergency services personnel

Tucked away in para 2.89 of HM Treasury’s Budget 2014 report was a proposal to extend the existing IHT death on active service exemption for members of the armed forces to embrace members of the emergency services too. The full paragraph is set out in the box on page 13. HMRC published a consultation paper (CP) on this proposal on 23 July 2014. The consultation closed at noon on 15 October 2014. HMRC proposed that draft legislation will be published at the Autumn Statement 2014, to be effective retrospectively from 19 March 2014.

Sheffield v Sheffield clarifies liability for historic breaches of trust. Douglas Rhodes explains

At its core, the facts of Sheffield v Sheffield [2014] are not uncommon. A trust set up for tax planning purposes was not operated according to its terms and, several years later, the beneficiary of the trust claimed – ultimately successfully – an account of the income to which he was entitled. However, along the way the case raised novel issues concerning, among other things, sham trust arrangements, sub-trusts, estoppel, laches/acquiescence and the effect of deliberate concealment on the limitation of actions. In addition, the case is a salutary reminder of the central importance of documentary evidence in disputes which concern events that took place many years ago. This article considers only the most notable points raised for practitioners.

Amanda Noyce examines Hart v Burbidge [2014] and its lessons on the presumption of undue influence and lifetime gifts

Most practitioners in the field of contentious probate – or even non-contentious wills and probate – have been presented with a typical ‘stinky will’. By this I mean a suspicious late will, cutting out one or more siblings and leaving all to one; or cutting out the family and leaving all to the carer. We all know that ‘it smells’ but how can we prove it? And what are the real chances of success in challenging the will through the courts?

Paul Davidoff sets out the implications of ss177-178 of the Finance Act 2013

Glad tidings of great joy were declared last year for mixed domiciled married couples and civil partners. No longer will they be discriminated against when it comes to the inheritance tax (IHT) ‘spouse exemption’ under s18 Inheritance Tax Act 1984 (IHTA). Well, good news is never quite as good as it sounds when it comes to tax.

Geoffrey Shindler comments on the Autumn Statement

Remember that old file of papers that you stuffed away in a dirty brown envelope and which you were under matrimonial pressure to consign to the paper recycling department? Remember how you thought, ‘one day perhaps, perhaps just one day, my life might change as a result of the contents of these dirty old papers.’ So you resolved to retain them.

Dominic Lawrance and Mark Summers review the impact of the UK/Swiss tax co-operation agreement two years on

The UK/Swiss tax co-operation agreement (TCA), or ‘Rubik’ agreement, was brought into force on 1 January 2013. It was intended to satisfy the demands of the UK government that Swiss banks should stop facilitating tax evasion by UK residents, including UK residents who could benefit from assets custodied in Switzerland and held by non-resident entities such as offshore companies, foundations and trusts.