The income of a fund was to be held on trust for the support or benefit of the members of a class as the trustees might decide in their discretion. The trustees resolved in each of three successive periods to distribute part of the income to certain adult beneficiaries and declared the balance to belong to infant beneficiaries in specified shares. The minute of each resolution went on to record that the trustees were of the opinion that none of the income falling to infant beneficiaries under the resolution was required for the maintenance of the beneficiaries and accordingly they resolved that the income should be accumulated under section 31 of the Trustee Act 1925. In this, the trustees had had regard to the fact that if income were distributed it would be subject to surtax whereas if it were accumulated it would not be taxed in that way. They came to doubt whether what they had done had been effective as they had intended, and they brought proceedings to have the position clarified, joining the adult beneficiaries and the infant beneficiaries as defendants.
Held: The allocation of the income to the infants for accumulation was not a valid exercise of the power conferred by the settlement.
Harman J
[1951] Ch 209, [1950] 2 All ER 891
Trustee Act 1925 31
England and Wales
Cited by:
Appeal from – In Re Vestey’s Settlement CA 2-Jan-1951
The trustees of a large settlement made by Lord Vestey and his brother Sir Edmund Vestey exercised their discretion over the allocation of income with the apparent intention of income being accumulated during the minorities of a number of . .
Cited – Futter and Another v Revenue and Customs; Pitt v Same SC 9-May-2013
Application of Hastings-Bass Rule
F had created two settlements. Distributions were made, but overlooking the effect of section 2(4) of the 2002 Act, creating a large tax liability. P had taken advice on the investment of the proceeds of a damages claim and created a discretionary . .
Lists of cited by and citing cases may be incomplete.
Updated: 29 July 2021; Ref: scu.509126
