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Trusts and Estates Law and Tax Journal: July/August 2014

Geoffrey Shindler looks forward to a break from the cares of practice this holiday season

As far back as springtime we used to wish, in Robert Browning’s words, ‘Oh, to be in England/Now that April’s there…’. We have moved on. It is now, metaphorically if not actually, bucket and spade time. Time to forget the trials and tribulations of the contemporary world and embark upon all that serious and uplifting reading that is lying on the table next to our bed and which we have promised ourselves that we would embark upon as soon as office matters were concluded for the academic year.

Marilyn McKeever finds an absence of ‘joined-up thinking’ in current tax policy concerning residential property

The hallmarks of a good tax system, as even the government acknowledges, are that it should be certain, stable and fair. I am sure that readers can think of many areas where the UK tax system falls far short of this perfection, but I want to focus on the taxation of residential property, particularly as it affects trustees.

Benedict Sefi outlines the lessons to be learned from Fischer v Diffley [2013]

On 18 December 2013 His Honour Judge Dight, sitting as a judge of the High Court, gave a judgment in which he declared as invalid two testamentary papers on grounds of testamentary incapacity and want of knowledge and approval.

Carey Olsen

Lloyds Trust Co (CI) Ltd v Fragoso [2013] provides clarification for Jersey on how trustees hold assets derived from bribes in a trust. Alexa Saunders gives the lowdown

In its recent decision of Lloyds Trust Co (CI) Ltd v Fragoso [2013], the Royal Court in Jersey declined to follow a line of authority from the English Court of Appeal and instead applied a decision of the Privy Council (on appeal from New Zealand), and in doing so provided some clarity on how assets in a trust that represent bribes received by the settlor are held by trustees.

Sarah Saunders considers where the powers of HMRC could lead

It was a bright cold day in December, and the office clocks were striking thirteen. I frowned and made a note to contact the landlord again; honestly if he cannot even get the clocks running right! I opened my Christmas present from the senior partner, a copy of 1984, how festive; produced to celebrate the thirtieth anniversary presumably. A quick skim reminded me of what a chilling tale it was, thank goodness it could never really happen. Full of the joys of Christmas, I relaxed and may have dozed slightly at my desk.

Jo Summers explains the point of the Law Society’s shari’ah practice note on wills, succession and trusts

A great outcry erupted in March when the Daily Telegraph announced that ‘Islamic law is adopted by British legal chiefs!’. There were demands for an inquiry, demonstrations outside the Law Society on Chancery Lane and members of the public signed petitions.

Mary Ashley examines the lessons from Jersey case In the Matter of the Strathmullan Trust [2014]

On 10 January 2014, in In the Matter of the Strathmullan Trust [2014], the representor, a settlor of a discretionary trust, successfully applied to the Royal Court of Jersey to set aside a trust governed by Jersey law for mistake. The mistake was caused by incorrect tax advice received by him in 1996 which led to the creation of a trust which attracted inheritance tax (IHT) liability under UK law.

Ogier Legal

Amanda Mochrie and Erin Trimble-Cregeen highlight how trustees can protect themselves from the consequences of an ‘insolvent’ trust

The recent judgment in the Guernsey case of Investec v Glenalla [2013] (which is currently the subject of an appeal and may very well go to the Privy Council), is an important one for practitioners to familiarise themselves with as it deals with the issues faced by trustees in circumstances where a trust’s liabilities outweigh its assets. Although, of course, a trust has no separate legal personality and therefore cannot, strictly speaking, be ‘insolvent’, legal technicalities aside, the situation faced in this case was, in essence, that of an insolvent trust. A review of the background, the facts and then the decision itself highlights that this case contains a number of important warnings to trust practitioners advising trustees in relation to transactions with third parties and the potential dangers and pitfalls should that trust become insolvent.