I5.1128 Settlor interested trusts—cases
In the definition of an interest in a settlement, the original legislation referred to an interest in 'income arising' under the settlement. In 1995 this wording was amended to 'an interest in any derived property'. In 2005 it was again amended to 'an interest in any related property'. The cases described below were determined by reference to the legislation applicable at the time, but it is considered that they will still apply to the legislation in ITTOIA 2005, s 625.
In Barr's Trustees1, the property in the settlement could eventually come to the settlor as an heir. The settlement was for the benefit of the children of his deceased son but if they both were to die under 30 years of age without leaving lawful issue, the funds were to go to the 'heirs and representatives in movables' of the deceased sons. It was possible for the settlor to be the heir so he was deemed to have an interest in the settlement.
Wide though the words 'any circumstances' in what became ITTOIA 2005, s 625(1) (see I5.1127) or, to use the original phrase, 'in any circumstances whatsoever' (see above) are, it seems clear, as the Crown admitted in Glyn2 that some limit must be placed on them. If this were not so, a settlor could be said to have an interest in virtually every settlement, as the remaindermen might gift their beneficial interests to him by Will.
It may be that the limit lies at the point