What are the tax consequences of a persons estate/ lifetime gift?
Inheritance tax - charged on transfer of value (transfer of persons estate on death and lifetime gifts)
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What is the nil rate band for tax?
£325k - after that it is 40%
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What are the tax consequences for settlor creation of trust?
taxation of the trust itself after creation
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What does a valid trust require?
A valid declaration of trust + constitution of trust + transfer of trust property into the trustees names
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What should the declaration of trust state?
Names of trustees/beneficiaries/ details of trust property/ nature of beneficiaries interest (vested or contingent)/ additional powers of trustees
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What must a declaration of trust comply with?
A declaration of trust is void unless it satisfies the 3 certainties as establish in Knight.
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What is certainty of intention?
Certainty on the part of the settlor to create a trust 'to hold on trust'
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What is certainty of subject matter?
The property 'what'
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What is certainty of objects?
Beneficiaries 'who'
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What is the beneficiary principle?
Trust that don't have beneficiaries are void as there needs to be sufficient direct benefit to enforce the trust
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What did Leahy establish?
"a trust may be created for the benefit of persons as beneficiaries, but not for a purpose..unless the purpose...be charitable. For a purpose cannot sue'
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What did Re Astor's Settlement establish?
A trust for the establishment, maintenance and improvement of good understanding between nations and the preservation of the independence and integrity of newspaper was void
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What are the rules against perpetuity?
Rules created to prevent most trust for running for too long
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What is method 1 for creating a trust?
In his lifetime, settlor declares himself a trustee. No need to transfer trust property; trust automatically constituted. Need correct declaration of trust and if property land - need written/signed evidence of declaration under s53(1)(b) LPA 1925
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What is method 2 for creating a trust?
In his lifetime, settlor transfer property to trustee to hold on trust. Need declaration of trust (if land signed writing) and transfer of the property to the trustee in correct manner
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What is method 3 for creating a trust?
Testator ways to create a trust in his will to have effect on his death. The will must contain a transfer of the property to trustee, valid declaration of trust - s9 Wills Act 1837
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When will a will be valid?
Under s9 Wills Act 1837 - the testator has to sign it in the presence of 2 witnesses
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What did Shah establish?
Arden LJ demonstrated that the actions of the settlor provide an important context to decide the meaning of the language used as the court must consider ‘the intention of the maker as manifested by the words he has used in the context relevant facts
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What did OT Computers establish?
Pumprey J held that the term ‘urgent suppliers’ was an insufficiently conceptually certain description of a class, so that the trustees could not draw up a complete list. The term ‘urgent’ was simply too vague.
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What did Duggan establish?
Hart J concluded that the language of the rules did not disclose an intention to create a trust, with a concomitant duty to ‘invest’ the money, but only create the relationship of debtor and creditor.
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What did David Veale establish?
Need valid declaration of trust (evidence in signed writing contained all the terms of the trusts, if land s53(1)(b) LPA 1925.The wife didn’t sign it, therefore can’t be a valid declaration of trust.
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Other cards in this set
Card 2
Front
What are the advantages/disadvantages of professional individuals as trustees?
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