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Trusts and Estates Law and Tax Journal: March 2016

The position of trustee is not for the faint-hearted. Geoffrey Shindler explains

The following quotation of Lord Hardwicke LC in Knight v Earl of Plymouth [1747] is well known and is no doubt inscribed on the heart of all professional trustees: ‘A trust is an office necessary in the concerns between man and man and… if faithfully discharged, attended with no small degree of trouble and anxiety’, so that ‘it is an act of great kindness in any one to accept it’.

Paul Newman QC examines claims for trust documents under the Data Protection Act 1998, with reference to Dawson-Damer v Taylor Wessing LLP [2016]

Disgruntled beneficiaries seeking documents on which to base claims for breach of trust must either seek disclosure from trustees under general equitable principles, or else commence proceedings and seek disclosure under the Civil Procedure Rules. The former requires the court to exercise its discretion in favour of the beneficiary and the latter is only possible if there is sufficient evidence on which to have commenced proceedings in the first place.

Jonathan Grogan looks at the pros and cons of removing personal representatives

Applications to remove personal representatives (PRs) under s50 Administration of Justice Act 1985 are certainly a useful, often necessary, tool for resolving disputes over the administration of an estate. They appear to have become more popular in recent years and there is a steady stream of court decisions concerning them (including applications to remove will trustees using the provisions of the Trustee Act 1925 or under the inherent jurisdiction of the court). We will look at some of the more recent cases in this article. Although it is true that reading judgments in s50 cases can help guide the practitioner in their dealings with the recurrent themes that crop up in this type of case, there will always remain a strong element of uncertainty in this area. Whereas all litigation carries inherent risks, this jurisdiction seems particularly difficult to second guess. And yet, because the parties can be very intransigent and the impasses they have reached can be so difficult to resolve, cases can be more likely to go to trial.

Mark Pawlowski asks whether political activities should be charitable

Charities are becoming more political in character and less concerned with symptomatic relief. The concept of charity today is one of public campaigning, lobbying and self-promotion. But to what extent has charity law reflected this increasingly important role? The writer suggests that it may be time to review the scope and significance of the legal principle that political activities are not charitable.

Lucy Cooling and Sarah Wood give the lowdown on government proposals for tax planning

In July 2015, the government published consultation documents on the use of deeds of variation and also the extension of the Disclosure of Tax Avoidance Schemes (DOTAS) to inheritance tax. Responses to the consultations closed on 7 October and 10 September 2015 respectively.

Jonathan Shankland and Celia Speller provide an update on the residence nil-rate band

The residence nil-rate band (RNRB) was announced in the July 2015 Budget as a means of achieving the Conservative Party’s manifesto promise to increase the inheritance tax (IHT) nil-rate amount to £1m for married couples/civil partners. The £1m figure is achieved by using a combination of the nil-rate band (NRB) tax-free amount (fixed at £325,000 until April 2021), the transferable NRB (spouses/civil partners) and the RNRB.

Forsters LLP

Zahra Kanani outlines Green v HMRC [2015] which upholds the principle that BPR does not apply to furnished holiday lets and clarifies ‘investment’ activities.

In May 2015, the First Tier Tribunal held that inheritance tax business property relief (BPR) did not apply to a taxpayer’s furnished holiday letting business. The facts of the case were similar to that of HMRC v Pawson [2013]. Although the case does not establish any new points of law, it will be of interest to practitioners advising clients who own furnished holiday lets and shows that they will have an uphill struggle in persuading any court that their business is more akin to the running of a hotel. The decision did, however, bring some further clarity as to where the tribunal now draws the line between ‘investment’ and ‘non-investment’ activities.

Laytons

McCabe v McCabe [2015] reaffirms the legal test for testamentary capacity in Banks v Goodfellow [1875]. Simrun Garcha reports

The High Court’s recent decision in McCabe v McCabe [2015] reinforces the legal test for testamentary capacity established in the case of Banks v Goodfellow [1875] and is likely to be useful for both will drafters and contentious solicitors alike. The court explored in great detail (with the trial lasting 11 days and the judgment amounting to 171 pages) the issues surrounding testamentary capacity and it serves as a reminder that each case is to be decided on its individual facts and detailed investigations need to be undertaken to establish whether a testator had the requisite capacity to make a valid will.