Before his death, the deceased had advanced sums to his sons. The House was asked whether they were liable to Estate Duty.
Held: Lord Reid said: ‘no object of a discretionary trust has, as such, any legal right to or in the capital’, although he may possess limited equitable rights against the trustee; ‘mere expectancy or hope of consideration by the trustee” and ”In possession’ must mean that the interest enables you to claim now whatever may be the subject of the interest. For instance, if it is the current income from a certain fund your claim may yield nothing if there is no income, but your claim is a valid claim, and if there is any income you are entitled to get it. But a right to require trustees to consider whether they will pay you something does not enable you to claim anything. If the trustees do decide to pay you something, you do not get it by reason of having the right to have your case considered: you get it only because the trustees have decided to give it to you.’
Lord Wilberforce said that the circumstances in which a beneficiary under a discretionary trust may seek protection, and the nature of the protection he may expect to obtain, will depend on the court’s discretion.
Judges:
Lord Reid, Lord Wilberforce, Viscount Dilhorne
Citations:
[1967] UKHL 6, [1968] AC 553, [1968] 1 All ER 121, [1967] TR 309, [1968] 2 WLR 277
Links:
Jurisdiction:
England and Wales
Cited by:
Cited – Regina v Stannard CACD 1-Nov-2005
The defendant had been convicted of offences in which he had operated to purchase companies and use false debentures to evade corporation tax. Compensation had been sought under the 1988 Act. It was argued that the confiscation order should be . .
Lists of cited by and citing cases may be incomplete.
Trusts, Inheritance Tax
Updated: 04 July 2022; Ref: scu.234398