317 / 342
GAZETTE
SEPTEMBER 1987
discretionary trusts for the benefit
of Mrs. D and her children. Mrs. D
and not B is the "disponer" in rela-
tion to these trusts:
A. G. -v- Baker
4 H & N 19. "The deed proceeded
on a claim of right on (Mrs. D's)
part. The arrangement embodied in
the deed was one of which she
was the head, and not (B). If I were
called upon to decide the question
I should say that (Mrs. D) was the
settlor": 30 per Pollock CB.
Example (4)
A child actress, A, is awarded a
part in a major film. On the advice
of her father's accountants, a com-
pany is incorporated which enters
into a contract with the film studio
to provide her services for an
agreed consideration. At the same
time a discretionary trust fund is
established with an initial trust
fund of £100, provided by A's
father, B, who is named in the trust
instrument as the settlor. The
trustees apply the initial trust fund
of £ 100 in taking up 100 shares of
£1 in the capital of the company.
No further shares are issued. The
effect of the arrangement is to
divert A's earnings from herself
personally to the company, the
shares in which increase in value as
payments are made to it by the
studio. Before carrying the scheme
into effect, B's accountants
endeavour to explain its effect to
A, who is totally uninterested and
signs the relevant documents
without even reading them.
The property "subject t o" the
trust is clearly the 100 shares of £ 1
in the capital of the company.
What is less easy to identify is the
"disposition" under or in conse-
quence of which the shares
became subject to the trust, and
the "disponer" in relation to that
"disposition".
On the one hand, it is arguable
that the "disposition" under or in
consequence of which the shares
became subject to the trust could
only be the trust instrument itself,
in relation to which B and not A is
clearly the "disponer". Authority
for this view is to be found in
Chamberlain -v- C/R
25 TC 317.
On the other hand, it is equally
well arguable that the shares
became subject to the trust under
or in consequence of an "arrange-
ment" in relation to which A and
not B was the disponer. Support for
this latter view is to be found in the
extended meaning given to the
word "disposition" by s.2(1)
CATA 1976, which in para, (b) of
the definition of "disposition"
defines it to include an "arrange-
ment, whether made by a single
operation or by associated opera-
tion". It is accordingly arguable
that the "disponer" in relation to
a disposition which is an "arrange-
ment" is the person who "directly
or indirectly" provides the proper-
ty "comprised in" the arrange-
ment, and which as part of that
arrangement "becomes subject
t o " the trust. Authority for this
alternative view is to be found in
Mills -v- CIR
49 TC 367 in which
it was held that by entering into the
arrangement A had " . . . secured
that what she earned by her acting
should be paid to Sussex Produc-
tions and so she indirectly provid-
ed funds for the trust": 408 per
Viscount Dilhorne.
The general definition of
"disponer" in s.2(1) CATA 1976
is supplemented by four para-
graphs which identify the
"disponer" in specific instances.
Paras (a) (b) and (c) of the defini-
tion provide that the "disponer" in
relation to a will or other testamen-
J . & E. DAVY
STOCKBROKERS
Personal Investment Division
For
SPECIALISED INVESTMENT ADVICE
UNIT LINKED INVESTMENTS
GUARANTEED BONDS
6 0 / 3 D AWSON STREET,
DUBL IN 2.
Phone: 7 7 2 4 1 6 .
307