Payments to trustees, which a testator had directed should be paid from a charitable trust for their work as trustees, were held to be earned income. The Revenue had contended that they were investment income because it was repugnant to the nature of trusteeship that they should receive a profit from the performance of their duties as trustees. A trustee held an office, a term which could describe ‘any position in which services are due by the holder and in which the holder has no employer.’
Lord Normand explained: ‘I think there is confusion here between the source of the payment, which is the testator’s bounty as expressed in his will, and the quality of the payment as earned or not earned. There need be no incompatibility in saying that the income is the conditional gift of the testator but that it has to be earned by compliance with the testator’s condition of serving as a trustee.
I would observe more generally that the question whether income is earned or not is a question which arises between the trustee and the Inland Revenue, and it has no relation either to the legal duty which a trustee owes to the trust and the beneficiaries, or to the legal conception that such a payment as that under consideration derives from a testator and can be regarded as a legacy. The source of the sum and its character as a receipt in the hands of the trustee are two separate and unconnected things’
Judges:
Lord Normand
Citations:
[1954] AC 11
Jurisdiction:
England and Wales
Cited by:
Cited – Percy v Church of Scotland Board of National Mission HL 15-Dec-2005
The claimant appealed after her claim for sex discrimination had failed. She had been dismissed from her position an associate minister of the church. The court had found that it had no jurisdiction, saying that her appointment was not an . .
Lists of cited by and citing cases may be incomplete.
Employment, Income Tax
Updated: 23 November 2022; Ref: scu.236511