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• GAZETTE

JANUARY/FEBRUARY 1988

LAW SOCIETY

ANNUAL CONFERENCE

5 - 8 May 1988

This year's Law Society Conference, which will be held in Jury's Hotel, Cork, from May 5 to May

8 inclusive, will have as its centrepiece presentations by David Andrews entitled "Mak i ng the Law

Office Wo r k" and "Practice Development".

David Andrews is a former Chairman of the International Bar

Association's General Practice Section and served as Chairman of

the Section's Committee on Law Office Management and

Technology. A former Managing Partner of a major London practice,

he is currently the principal of the David Andrews Partnership which

operates a consultancy in association w i th the well-known

American firm of Altman & Weil.

Further details of the Conference will be circulated to members

shortly.

their own affairs by reason of "age

or improvidence, or of physical

men t al or legal i n c a p a c i t y ":

s.108(d) FA 1984.

S.65 FA 1985 exempts t wo

further categories of trust property.

These are (a) trust property subject

to a discretionary trust on the

termination of which the State will

take a gift or an inheritance, and (b)

a sum wh i ch is the subject matter

of an inheritance deemed to be

t aken by t he t r u s t e es of a

discretionary trust by reason of

s.31 CATA 1976.

The first of these is relatively

s t r a i g h t f o r wa r d. An obv i ous

example would be a bequest to the

State, subject to a discretionary

trust to maintain the testator's

w i dow during her lifetime.

The second is more obscure. It

appears to relate to property which,

wh i le not being ac t ual t r ust

property, is nevertheless property

of which the trustees of a dis-

cretionary trust have the " use

occupation or en j oymen t" other-

wise than for " f u ll consideration in

money or money's wo r t h" within

the meaning of s.31(1) CATA 1976.

In the normal course of events,

the trustees of a discretionary trust

f avou r ed

w i t h

such

" u s e

occupation or enjoyment" would

take no gift or inheritance, neither

they nor any of the potential

ob j e c ts of t he t r u st

being

" b e n e f i c i a l ly

en t i t l ed

in

possession" within the meaning of

s.5(1) or s.11(1) CATA 1976.

Why the enactment of s.106(1)

FA 1984 and s. 103(1) FA 1986

should affect the position is not

clear

,d)

. The notional " s u m "

brought into being by s.31(3) CATA

1976 has no real existence and is

therefore incapable of becoming

"subject to a discretionary t r u s t"

within the meaning of s.106(1) FA

1984 and s.103(1) FA 1986. This

essen t i al p r e - c ond i t i on be i ng

absent, it follows that the " s u m"

would not be subject either to the

once-off inheritance tax of 3%

imposed by s.106(1) FA 1984 or to

the annual inheritance tax of 1%

imposed by s.103(1) FA 1986. If this

is so, the exemption in s.65(b) FA

1985 wo u ld appear to be

unnecessary.

Conclusion

It is a l ways t emp t i ng to

denounce the iniquities and imper-

fections of new fiscal legislation. It

is a temptation which the writer

proposes to resist in the present

instance and content himself w i th

pointing out, should such comment

be necessary, t h at t he new

legislation is a minefield, and

doubly

<e)

so w i th the introduction

of the stringent self-assessment

provisions in s.104(e) FA 1986. The

case for the careful administration

of discretionary trusts, and their

regular

r ev i ew

aga i nst

an

i nc r eas i ng ly

hos t i le

f i s cal

background, is plain for all to see.

FOOTNOTES

(a ) To this there is an unimportant exception

in s.104(b)(ii). Those interested are

referred to the Act.

(b) ". . . as if the trust and the trustees as

such for the time being of the trust were

together a person . . .": s.106(1) FA 1984

and s.103(1) FA 1986.

(c ) Subsequently appointed trustees are

likewise primarily accountable: s. 107(1)

FA 1984.

(d ) At any rate, to the writer, and to those

of his colleagues with whom he has

discussed the paragraph.

(e) Literally. See s.108(b) FA 1986.

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