Term
| For brand new trusts of land (e.g. house, land etc), what formalities must be adhered to? |
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Definition
| s53 (1) (b) LPA 1925 - transfer must be in writing and signed by the settlor. An oral declaration will not transfer the property. However, an oral declaration & signed writing at a later date will suffice. E.G. disposition takes place on oral declaration (however at this point = unenforceable), settlor can then write at a later date 'I confirm that I made an earlier transfer' (at this point the trust is enforceable. |
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Term
| For brand new trusts of property (other than land), what formalities must be adhered to? (e.g. money, a painting, etc..) |
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Definition
| NONE - e.g. Paul v Constance |
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Term
| For dispositions of existing equitable interests, what formalities must be adhered to? |
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Definition
| s53 (1)(c) LPA 1925 - Must be in writing and signed by the settlor AT THE TIME the disposition is made. Cannot make an oral declaration & then put it in writing at a later date - THIS WILL NOT SATIFY THE REQUIREMENTS, MUST BE AT THE TIME OF DISPOSITION. |
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Term
| Timpsons Executors v Yerbery [1936] |
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Definition
THE HOLDER OF AN EQUITABLE INTEREST UNDER A TRUST CAN DISPOSE OF THE INTEREST IN FAVOUR OF A THIRD PARTY IN FOUR DIFFERENT WAYS.
1) ASSIGN THE BENEFICIAL INTEREST TO THE 3RD PARTY
2) TELL THE TRUSTEES TO 'HOLD FOR 3RD PARTY'
3) CONTRACT TO ASSIGN TO 3RD PARTY (FOR CONSIDERATION)
4) DECLARE SELF AS TRUSTEE FOR THE 3RD PARTY |
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Term
| According to Timpsons Executors v Yerbery [1936], what are the four ways in which an existing beneficiary can dispose of their equitable interest in favour of a 3rd party? |
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Definition
1) ASSIGN THE BENEFICIAL INTEREST TO THE 3RD PARTY
2) TELL THE TRUSTEES TO 'HOLD FOR 3RD PARTY'
3) CONTRACT TO ASSIGN TO 3RD PARTY (FOR CONSIDERATION)
4) DECLARE SELF AS TRUSTEE FOR THE 3RD PARTY |
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Term
| If an existing beneficiary wishes to dispose of his equitable interest by 'assigning it to a 3rd party', how can he do this? |
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Definition
Assigning equitable interest = a classic disposition
s53(1)(c) applies - must be put in writing AT THE TIME OF DISPOSITION |
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Term
| If an existing beneficiary wishes to dispose of his equitable interest by 'directing his trustees to hold the interest for a 3rd party', how can this be done? |
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Definition
s53(1)(c) applies - must be in signed writing AT THE TIME OF DISPOSITION
Grey v IRC [1960] - S53(1)(C) APPLIES TO ANY METHOD WHERE THE EQUITABLE INTEREST TRANSFERS FROM ONE PERSON TO ANOTHER. |
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Term
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Definition
S53(1)(C) LPA APPLIES TO ANY SITUATION IN WHICH THE EQUITABLE INTEREST IS PASSING FROM ONE PERSON TO ANOTHER (excluding Vandervell exception - where beneficial & legal interest pass to one person)
Grey wanted to benefit his grandchildren, however he wanted to avoid stamp duty, so he used a complex method for creating a trust for his children.
1) Grey created a trust under which he was a beneficiary
2) A short while later, Grey orally requested that his trustees hold his beneficial interest on trust for his grandchildren
3) Grey though that the term 'disposition' was limited in its meaning to grants and assignments, so that the oral disposition Gray made was not a disposition within s53(1)(c)
HELD - the oral direction was an attempted disposition of a subsisting equitable interest, and was thus ineffective since it was not in writing, as required by s53(1)(c) LPA.
HOWEVER, a short while after the oral disposition, Grey had produced a deed, confirming that the disposition had taken place... HoL held that this deed satisfied the s53(1)(c) criterion... however, CRITICISM - it does not follow that, if that state of affairs had failed to come about, the deed - intended to be confirmatory - should bring about that state of affairs. |
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Term
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Definition
WHERE THE LEGAL AND BENEFICIAL INTEREST TRANSFER TO THE SAME PERSON, NO NEED TO COMPLY WITH S53(1)(C) - KIND OF LIKE, WHEN THEY'RE TRAVELLING TO THE NEXT PERSON, THE L AND B INTEREST REJOIN, THEREFORE, THERE IS NO LONGER A SUB-SISTING BENEFICIAL INTEREST
IN THIS CASE THERE WAS ALSO A RESULTING TRUST, BECAUSE THE SETTLOR FAILED TO IDENTIFY INTENDED BENEFICIARIES...
In order to avoid tax, Vandervell put the following scheme in to place...
1)Vandervell was the beneficiary under a trust, and the National Provincial Bank were the trustees
2) Vandervell instructed the NPB to transfer the property (legal and beneficial interest) to the National College of Surgeons
IRC argued that the beneficial interest could only pass if Vandervell had complied with s53(1)(c)
HELD - HoL disagreed with the IRC, as the beneficial interest AND the legal interest were both being transferred, the B & L interests re-joined, and there was no longer a sub-sisting B interest.
CASE CAN ALSO BE USED FOR CERTAINTY OF SUBJECT MATTER, BECAUSE VANDERVELL KEPT AN OPTION ON THE PROPERTY, WHICH WAS TO BE HELD ON TRUST, HOWEVER, HE FAILED TO ASSIGN THE BENEFICIAL INTEREST TO ANYONE, SO IT REVERTED BACK TO HIM & HE HAD TO PAY TAX ON IT |
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Term
| What is the difference between Grey v IRC [1960], and Vandervell v IRC [1967] |
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Definition
| In Grey, Grey attempted to transfer only an equitable interest, therefore he had to comply with s53(1)(c). However, in Vandervell, Vandervell wanted to transfer both Beneficial and legal title, therefore s53(1)(c) did not apply, as it only applies to assignations of EXISTING EQUITABLE INTERESTS... in this case, the equitable and legal interests were travelling to the recipient. |
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Term
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Definition
| It is a tax you have to pay on documents which transfer something of value. Paid as a proportion of the value of what is being transferred. All s53(1)(c) documents are therefore subject to stamp duty if they transfer something of value. |
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Term
| Where the owner of a beneficial interest wishes to transfer their beneficial interest to a 3rd party by way of a contract (including valuable consideration), will this transfer be subject to s53(1)(c) |
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Definition
| UNDECIDED - However, Neville v Wilson [1996] = most recent case, and this seems to suggest that the transfer is not subject to s53(1)(c) as, once a contract has been signed, 'equity sees as done, that which ought to be done', therefore, there will be a constructive trust, and by way of s53(2), constructive trusts are exempt from s53(1)(c) |
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Term
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Definition
| A CONTRACT FOR VALUABLE CONSIDERATION TO ASSIGN AN EQUITABLE INTERES IS EXEMPT FROM S53(1)(C) AS, EQUITY SEES AS DONE, THAT WHICH OUGHT TO BE DONE. tHEREFORE = CONSTRUCTIVE TRUST, AND S53(2) EXEMPTS CONSTRUCTIVE TRUSTS FROM S53(1)(C) REQUIREMENTS. |
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Term
| If the beneficiary under a trust self-declares himself as holding his equitable interest on trust for a 3rd party, must this transfer of beneficial interest comply with s53(1)(c)? |
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Definition
UNCERTAINTY. Two ways of looking at it:
1) If the sub-trust is a bare trust (trust in which all conditions are met), then the original beneficiary has no active duties. Therefore, he drops out the picture... and this looks suspiciously like a disposition of beneficial interest (similar to Grey v IRC [1960])... therefore, s53(1)(c) might apply.
2) If the original beneficiary has some duties as trustee to the new beneficiary, then this looks a lot more like the creation of a new trust... therefore, if the property in question is not land, then there are no s53 requirements that have to be adhered to. |
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Term
| W.r.t beneficiary declaring himself as holding his interest on trust for a 3rd party... under what circumstances will it look more like a disposition? |
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Definition
| Where the original beneficial owner retains no duties |
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Term
| W.r.t beneficiary declaring himself as holding his interest on trust for a 3rd party... under what circumstances will it look more like the creation of a sub-trust? |
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Definition
| Where the original beneficial owner retains some duties... e.g. makes a discretionary trust, or holds on to the life interest and makes the 3rd party the remainderman. |
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