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Declaration made that each Plaintiff held
under the Council the office of cottage rent
collector for his district.
(Ryan and Golden v. Tipperary
(South
Riding) County Council—Judgment delivered
20/12/1967).
No Estate Duty Payable on Advances
By the will, made in 1934, the testator
gave a quarter of his residuary estate to his
trustees on trusts during the life of his son
to pay or apply the whole or such part as
they should in their absolute and uncon
trolled discretion think fit, for the benefit of
his son or the son's wife or children, and to
accumulate any surplus income. The trustees
could resort to the accumulations at any time
during the son's life and use them for the
same class of persons. After the son's death,
the share was to be held for such of his
children as should attain 21 or, if daughters,
marry; and there was a power of advance
ment in favour of any grandchild up to a
half of his or her presumptive or vested
share.
The testator died in 1941. On January 2,
1962, the trustees made advances to the twin
sons of the testator's son out of the capital
of the one-fourth share, of a value of about
£23,500 each. On May 8, 1963, the testator's
son died.
The Crown claimed estate duty on his
death on the funds advanced, under section
43 of the Finance Act, 1940. The conditions
in that section for a charge of estate duty
are: ". .
. where an interest limited to cease
on a death has been disposed of or has
determined .
.
. after becoming an interest
in possession."
It was held by the House of Lords that the
object of a discretionary trust did not have
"an interest" in the trust fund, let alone "an
interest in possession", within the meaning
of the section which was passed to catch
dispositions made within five years of a
death. He held that Estate duty on
the
amount advanced was not payable on the
father's Estate.
(Gartside and Another v. Inland Revenue
Commissioners—The Times, December 14th,
1967).
Variation of Settlement to Avoid Duty Upheld
A variation of a 1927 settlement under the
Variation of Trusts Act, 1958, for the ad
mitted purpose of avoiding estate duty other
wise exigible on the death of the settlor's
widow, succeeded in
its object when the
House of Lords held that the effect of the
arrangement was
to prolong beyond
the
widow's death a discretionary trust which,
under the settlement, would have come to
an end on her death, and so to avoid estate
duty.
(I.R.C.
v. Holmden
and Others —The
Times, December 14th, 1967.
Redundancy Payments
—
Transfer of a
Business
When
redundant
employees were
dis
missed in December, 1966, the amount of
their redundancy payments depended on
whether a transaction in June, 1964, between
their employers and a firm who had pre
viously employed them was a 'transfer of a
business' within
paragraph
10
(2)
of
Schedule 1 to the Contracts of Employment
Act, 1963, and section 1 and Schedule 1 of
the Redundancy Payments Act, 1965.
The Court said:
'In deciding whether a
transaction amounted to the transfer of a
business regard must be had to its substance
rather than its form and consideration must
be given to the whole of the circumstances.
In the end the vital consideration is whether
the effect of the transaction was to put the
transferee in possession of a going concern,
the activities of which he could carry on
without interruption.'
Mr. Justice Widgery, delivering the judg
ment of the Court, said the amount of re
dundancy payment depended on the length
of 'continuous service' which each respondent
could claim, each sought to aggregate the
periods of employments with the appellants
and others. His Lordship said that it would
be surprising in the context of the legislation
if the presence or absence of a transfer of
goodwill was conclusive. The absence of an
assignment of premises,
stock-in-trade or
outstanding contracts would not be con
clusive if the particular circumstances of the
transferee enabled him to carry on sub
stantially the same business as before.
The tribunal had reached its decision on
a broad view of
the circumstances as a
whole. That was the proper approach. The
appeals were dismissed.
(Kenmir Ltd. v. Frizzell and Others—The
Times, Thursday, December 14th, 1967).
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