Termination of trusts

Termination of trusts—methods of termination

An express trust, after it has become operative, may come to an end in a number of ways, for example:

•
the settlor may exercise a power of revocation or a power of appointment reserved to them in the trust instrument
•
it may be set aside under the provisions relating to the avoidance of transactions at an undervalue or to dispositions in fraud of creditors, on the ground that the disposition was induced by fraud, duress, undue influence or mistake
•
in the case of matrimonial proceedings or proceedings on the dissolution of a registered civil partnership, the court has power to:
1. ◦
  adjust interests in settlements
2. ◦
  set aside a disposition intended to defeat a claim for financial relief in such proceedings
3. ◦
  set aside a settlement made in compliance with a property adjustment order in matrimonial proceedings where this would amount to a transaction at an undervalue in an insolvency
•
the passage of time
•
due to rules of construction: the rule in Andrews v Partington [1775-1802] All ER Rep 209; the rule in Lassence v Tierney [1843-60]

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

TAKE A FREE TRIAL

Latest Private Client News

Market value, distributions and notional transactions—key SDLT lessons from Tower One St George Wharf Ltd v HMRC

Tax analysis: In Tower One St George Wharf Ltd v HMRC, the Court of Appeal considered the basis on which stamp duty land tax (SDLT) should be assessed and whether that resulted in SDLT being paid on the market value, the actual consideration paid, or on some other basis for a complex transaction within a corporate group. The taxpayer argued that the ‘Case 3’ exception under section 54(4) of the Finance Act 2003 (FA 2003) applied, which would result in SDLT being charged on the actual consideration. HMRC argued that the exception did not apply, which would result in SDLT being paid on the market value of the property. Alternatively, HMRC argued that if the exception did apply then the anti-avoidance provisions at section 75A FA 2003 applied, potentially resulting in an even higher SDLT charge. The Court of Appeal held that although the Case 3 exception applied, the anti-avoidance provision in FA 2003, s 75A also applied. This resulted in SDLT being assessed on an aggregate amount that was even higher than the property's market value (although HMRC did not seek to increase its assessment beyond market value). Therefore, the appeal was dismissed. As explained by Jon Stevens, partner, and Rory Clarke, solicitor, at DWF Law LLP, this decision deals with the interaction of a number of complex SDLT provisions and clarifies the SDLT provisions relating to transfers to connected companies and the SDLT anti-avoidance provisions, with implications for corporate structuring and tax planning.

Landmark Privy Council judgment clarifies the test for fraudulent misrepresentation

Private Client analysis: In Credit Suisse Life (Bermuda) Ltd v Ivanishvili [2025] UKPC 53, the Privy Council considered the requirements of a claim in fraudulent misrepresentation. Significantly, the Board held that claimants do not need to prove their conscious awareness or understanding of a representation, so long as they can show that the representation induced them to enter the contract. Written by James Smith, barrister at Outer Temple Chambers.

Deadline of 31 December 2025 for trusts to register under AEOI regulations

The CIOT and ATT have released reminders of the deadline of 31 December 2025 for trusts to register under AEOI regulations.

Finance Bill 2026–Registration of tax advisers

Tax analysis: Legislation proposed by the government in Part 7 of the Finance Bill 2026 will mandate that tax advisers register with HMRC. The registration scheme is designed to address inconsistencies across HMRC’s current services, to ensure minimum standards among advisers and reduce the presence of so-called ‘bad actors’ in the sector. Any individual or organisation offering tax advice, which is defined broadly, must register with HMRC. Failure to register can lead to compliance notices giving an opportunity to register, fines and orders ultimately preventing future registration indefinitely. Exemptions to registration include responding to requests for information from HMRC or interacting with HMRC in relation to an appeal to the tribunal. Written by Gideon Sanitt, a partner in the litigation and dispute resolution team at Macfarlanes LLP, and Joshua Rutt, an associate in the litigation and dispute resolution team at Macfarlanes LLP.