Commentary

I5.1111 Cases on the settlements legislation

IHT, trusts and estates

I5.1111 Cases on the settlements legislation

I5.1111 Cases on the settlements legislation

Many of the cases described below were concerned with the interpretation of earlier legislation which has been replaced in succession by ICTA 1988, s 681(4), ICTA 1988, s 660G and now by ITTOIA 2005, s 620(1). There has been virtually no change in the definition of a settlement, so the decisions are still relevant.

In Payne1 it was held that, where a settlor covenanted to make payments to a company (controlled by himself) until the liquidation of the company, the settlement consisted of the deed of arrangement and the whole framework of the company. In this connection Greene MR said2:

'The word in the definition clause of 'settlement' which is relevant to that question is the word 'arrangement'. The word 'arrangement' is not a word of art. It is used, in my opinion, in this context in what may be described as a business sense, and the question is: can we find here an 'arrangement' as so construed? … It appears to me that the whole of what was done must be looked at; and when that is done, the true view, in my judgment, is that Mr Walter Payne deliberately placed himself into a certain relationship to the company as part of one definite scheme.'

This was applied in Burston3, where the formation of a trust company, the re-arrangement of its capital with settlements of funds invested by means of this re-arrangement, and other activities, were described as 'one indivisible arrangement'.

The observations of Greene MR in

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