The Gazette 1988

JANUARY/FEBRUARY 1988

GAZETTE

remainders over. It was held that the " d i spos i t i on" " u n d e r" which B became entitled on A 's death was not the original settlement but the resettlement. To answer (B) is less difficult. Once the " d i spos i t i on" " u n d e r" (or " i n consequence o f " ) wh i ch the property became subject to the trust has been identified, the " d i s p o n e r" in relation to that " d i spos i t i on" is usually not hard to find. In Example (1), for instance, the " d i spos i t i on" " u n d e r" wh i ch the property became subject to the trust was undeniably the trust in- strument itself, in relation to which A and not B was the " d i s pone r ". In Example (2) the " d i spos i t i on" " u n d e r " wh i ch the property (the policy) became subject to the trust was the assignment. The person who " p r ov i ded" the policy " f or the purposes" of this assignment was H and not C. In Example (3), on the other hand, the " d i spos i t i on" " u n d e r" w h i c h t he p r ope r ty (i.e. t he £ 3 0 , 0 00 settled on discretionary trusts for the benefit of Mrs. D and her children) became subject to the trust was the deed of family arrangement. One could argue, as the court in fact decided, that the tons et origo of the trust property was Mrs. D's claim and it was therefore she and not A who " p r o- v i ded" the property " f o r the pur- poses o f " the disposition. On the other hand one could argue equal- ly well, on the authority of A. G-v- Biggs [ 1907] 2 IR 400, that B "pro- v i ded" the property, whatever his motives may have been for enter- ing into the deed, or even that A " p r o v i d e d" the property as the in- testate out of whose estate the settlement was made. In Example (4) the " d i s pone r" could be B or A, depending on w h e t h e r t he " d i s p o s i t i o n" " u n d e r " wh i ch the property (the 100 shares of £1 in the company hiring out A ' s services to the film studio) was the trust instrument itself or the " a r r angemen t" of wh i ch the trust was a constituent part. In A. G -v- F/oyer 9 HLC 477 Lord Cranworth suggested (489) that w h e n a s c e r t a i n i ng t he " p r edecesso r" for the purposes of the former succession duty one should inquire " w h o is the convey- ing party out of whose estate the

interest in question has been deriv- ed?" It is submitted that this test is as good as any when determin- ing who " p r o v i d e d" the property " f o r t he pu r po s es o f " t he " d i spos i t i on ". More than one "d i sponer" S.2(1) CATA 1976 provides that " wh e re more than one person pro- vided the property each shall be deemed to be a disponer to the ex- tent that he so provided the proper- t y " . This corresponds to s. 13 SDA 1853 in the former succession du- ty legislation, except that the disponers are treated as being such to the extent that each provides the property comprised in the joint disposition instead of " i n equal pro- po r t i ons ". The combined effect of s. 106(1) FA 1984, s. 103(1) FA 1986 and the definition of " d i s pone r" in S.2(1) CATA 1976 wou ld thus appear to be such that the dis- cretionary trust in question is notionally divided into t wo or more trusts, the property subject to each having a different " d i s pone r ". It is difficult to see how effect can be given otherwise to the words refer- red to above in the definition of " d i s pone r" in s.2(1) CATA 1976. Example (7) Property is held upon trust for A, contingently on his surviving to a specified date, and if he does not DO YOU REALLY KNOW WHATS GOING ON? Telephone, room and bodyworn transmitters and recorders. SALES, LEASE, RENTAL AND CONSULTANCY For appointment or further information by next post phone 808848/775655 Telex: 91280 Fax: 775487

survive until that date, upon trust for B. A and B jointly settle the pro- perty upon discretionary trusts. A and B are both " d i spone r s" in rela- tion to the property subject to the discretionary trust, proportionate- ly to the values of their respective interests under the original settle- ment, calculated on an actuarial basis: in re Drake's Settlement Trusts [ 1938] Ch. 133. "Proper t y" "Pr ope r t y ", as used in the CATA 1976, is defined in s.2(1) CATA 1976 to " i n c l u d e" " r i g h t s" and " i n t e r e s t s" " o f any description" but is otherwise undefined. Use of the wo rd " i n c l ude s" in the defini- tion suggests that its purpose is to expand the meaning of the wo rd beyond its " n a t u r al i mp o r t ": Di/worth -v-CofS[ 1889] AC 99, 105 per Lord Watson. The "natural i mpo r t" of the wo rd " p r o p e r t y" is " t h a t wh i ch belongs to a person exclusive of others and wh i ch can be the subject of a bargain and sale to ano t he r ": Potter -v- IRC 10 Ex. 147, 156 per Pollock CB. As used in s. 106(1) FA 1984 and s. 103(1) FA 1986 the wo rd " p r o p e r t y" is subject to a further restriction in t hat neither (a) "interests in expec t anc y" nor (b) "interests in a policy of assurance upon human l i f e" are to be treated as such: s. 106(3) FA 1984 and s. 103(1) FA 1986: "Interests in expec t anc y" are defined in s.2(1) CATA 1 9 76 to " i n c l u d e" an " es t a te in remainder or reversion and every other future interest, whether vested or con t i ngen t ". Wi de t h o u gh t he d e f i n i t i on undoubtedly is, it does not extend to interests wh i ch are vested in po s s e s s i on but s u b j e ct t o defeasance. " A distinction has to be drawn between the exercise of a power to terminate a present right to present enjoyment and the e x e r c i se of a p o w e r w h i ch prevents a present right of present enjoyment arising": Pearson -v- IRC [ 1980] STC 318, 325 per Viscount Dilhorne. An interest in p r ope r ty w h i c h is v e s t ed in po s s e s s i on but s u b j e ct to defeasance is therefore " p r ope r t y" for the purposes of s. 106(1) FA 1984 and s. 103( 1) FA 1986: in re Kit pat rick's Po/cies Trusts [ 1966] Ch.730. An interest in property w h i c h is c o n t i n g e nt on t he attainment of a specified age, on

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