The Gazette 1967/71

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). 68