The claimants were beneficiaries, trustee and protector of a trust fund. In order to mitigate Capital Gains Tax liability they sought advice, and, following that advice, entered into a deed of gift in favour of the respondent charity. The deed needed to be dated in the new tax year, but was dated for the previous year. They sought a declaration that the deed was void ab initio, the directors having failed to address a relevant consideration.
Held: The declaration was granted. The matters which could, if present, be taken into account, can include factors which might vitiate the intended legal effect of the deed, including the fiscal effect. It was unrealistic to divorce the several steps from each other. Trustees must consider the fiscal consequences of their acts, and a failure to do so was capable of leading to the application of ‘the Rule in Hastings-Bass’.
Gazette 13-Sep-2001, Times 25-Sep-2001,  EWHC B2 (Ch),  STI 1225,  STC 1344,  WTLR 953,  BTC 178, (2000-01) 3 ITELR 846
England and Wales
Cited – Re Hastings-Bass; Hastings v Inland Revenue CA 14-Mar-1974
Trustees of a settlement had exercised their power of advancement under the section, in order to save estate duty by transferring investments to be held on the trusts of a later settlement. However the actual effect of the advancement was that the . .
applied – Green v Cobham ChD 19-Jan-2000
cw The Trustees had overlooked the fact that a Will Trust and two sub-settlements together constituted a single composite settlement for the purposes of CGT with a single body of trustees. As a result of his . .
Applied – Burrell and Sharman v Burrell, Shore, Tyrrell, etc ChD 23-Feb-2005
Shares were appointed by trustees in the mistaken belief that they attracted business property relief from Inheritance tax. They sought to set aside the appointment.
Held: Mann J applied the rule in Stannard v Fisons Pensions Trust and . .
Cited – Futter and Another v Futter and Others ChD 11-Mar-2010
Various family settlements had been created. The trustees wished to use the rule in Hastings-Bass to re-open decisions they had made after receiving incorrect advice.
Held: The deeds were set aside as void. The Rule in Hastings-Bass derives . .
Lists of cited by and citing cases may be incomplete.
Trusts, Capital Gains Tax
Updated: 23 December 2021; Ref: scu.163314