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Trusts and Estates Law and Tax Journal: March 2015

Geoffrey Shindler contemplates the current state of trust law

In life, expect the unexpected. That is a trite piece of philosophy, but it is surprising how often it is true. Advisers on investment, particularly stocks, shares, bonds and insurance policies, tell us that what goes up may come down and that past performance is no guide to future performance. All of which makes you think that investment is something of a gamble and the roulette table has its attractions. With land it may be different because, other than in places like Holland, no more land is being made and indeed, if the siren voices about global warming are to be believed, there will shortly be less rather than more land as sea levels rise.

Martyn Frost

Martyn Frost sums up the current position on MCA 2005 v Banks v Goodfellow

It is perhaps a sad reflection that almost ten years after the Mental Capacity Act 2005 we should still be debating whether or not its test of capacity accidentally replaced the long established common law test in Banks v Goodfellow [1870]. However, two recent views from the Chancery Division do encourage the hope that we might be near to a conclusion to the debate.

Sarah Clune sets out the lessons from the Amy Marion Dwyer Will Trust

In July, the Charity Commission published an inquiry report into the Amy Marion Dwyer Will Trust (registered charity number 1149743). The case highlights how a charity’s failure to take complaints seriously and resolve concerns will be treated by the Commission.


Simrun Seehra looks at IHT exemptions on gifts to charity, with reference to Routier

Lawyers in the wills and estate planning field commonly advise their clients on the inheritance tax (IHT) relief to be gained if they leave gifts in their wills to charities. In accordance with English law, a gift to a charity is exempt from IHT if it is held on trust for charitable purposes. However, individuals should be made aware that in order to gain the exemption, certain conditions apply.

Andrea Lynch considers AIB Group (UK) v Mark Redler & Co Solicitors, which has lessons on equitable compensation for breach of trust

The Supreme Court has given judgment in AIB Group (UK) Ltd v Mark Redler & Co Solicitors [2014], and it has taken the opportunity to clarify the remedy available for breach of trust, with particular reference to commercial trusts such as those seen between lenders and solicitors. The decision is a very good one for solicitors, in particular for those dealing with conveyancing transactions where a bank’s monies are held on trust.

Keith Dudley summarises the private client aspects of Sham Transactions

Some years ago Willoughby’s Misplaced Trust (second ed) by James Wadham was published by Gostick Hall Publications. As the title suggests, this book, a very good read and informative, concerned itself with sham transactions in the trust world. Sham Transactions is much more comprehensive and covers such areas as real estate, employment, contract, corporate, and tax as well as trusts. The book also deals with the historical context including the uncertain origin of the term.


Catherine Ball examines the argument for reform of inheritance tax relief after two revealing reports

In April and November of last year the National Audit Office (NAO) issued two reports heavily criticising the way that HMRC administer tax reliefs. In those reports it stated that the value of inheritance tax (IHT) reliefs is seven-times higher than the amount of IHT collected. It is not in the NAO’s remit to query policy, but could their observations, and the political reaction to them, lead to far-reaching changes to IHT and its reliefs?

The Guernsey Court of Appeal affirms the scope of the jurisdiction conferred by Article 51 of the Trusts (Guernsey) Law 2007. Hannah Southon and Alison Meek explain

The Jersey Court of Appeal decision In the matter of the B, C and D Settlements [2010] placed a significant limitation on the power of the Jersey court to make orders in respect of trusts in exercise of its jurisdiction under the Trusts (Jersey) Law 1984. As a Court of Appeal decision, it was also thought to be persuasive in relation to the Guernsey court’s analogous powers under the Trusts (Guernsey) Law 2007 simply because the tribunal which constitutes the Jersey Court of Appeal is frequently the same as the Guernsey Court of Appeal. At the heart of the decision lay the question of the extent to which the judiciary should seek to limit or quantify statute as a matter of the common law rather than exercise judicial discretion on a case by case basis. The recent Guernsey Court of Appeal decision In the matter of the R and RA Trusts [2014] confirms that, when the legislature has given jurisdiction to the court, it is not for the court to limit that power further but rather it is for the court to exercise judicial discretion in exercising the statutory power that it has. In the same judgment the Guernsey Court of Appeal also went some way towards encouraging trustees to feel less constrained in appealing decisions at first instance for fear of adverse cost orders.