Revenue and Customs Comrs v Trustees of the Peter Clay Discretionary Trust
[2009] STC 469[2008] EWCA Civ 1441
[2009] 2 W.L.R. 1353
[2009] 2 WLR 1353
[2009] 2 All ER 683
(Judgment by: Arden LJ)
Revenue and Customs Comrs
vTrustees of the Peter Clay Discretionary Trust
Judges:
Arden LJLloyd LJ
Sir John Chadwick
Legislative References:
Taxes Management Act 1970 - section 56A
Finance Act 1984 - section 127 of Schedule 22; paragraph 7 of Schedule 22
Income and Corporation Taxes Act 1988 - section 686
Finance Act 1997 - section 69 of Schedule 7; paragraph 12(1) of Schedule 7
Finance (No 2) Act 1997 - section 32(6)
Income Tax (Earnings and Pensions) Act 2003 - paragraph 100 of Schedule 6
Finance Act 1973 - section 16(2)(d)
Case References:
Jones v Bennett - [1896] 1 Ch 778
Carver v Duncan - [1985] 1 AC 1082
Carver v Duncan - [1985] AC 1082
Judgment date: 19 December 2008
Judgment by:
Arden LJ
44. I agree with the judgment of Sir John Chadwick and with the order he proposes.
45. The essence of the argument of Mr Prosser for the revenue with respect to the fees of the non-executive trustees was that a single fee was agreed for all the advice and thus that no apportionment was possible. In other words, the trust's obligation to pay for the non-executive trustees' services would only have been for advice given for the benefit of the trust as a whole. We have not seen any contractual documentation for the services of the non-executive trustees, but it would be a surprising omission if the contractual documentation showed that the non-executive trustees were only required to give the benefit of their advice if it was for the benefit of the trust as a whole. In those circumstances it must follow that the non-executive trustees can be called on within their retainer to give advice exclusively for the benefit of income beneficiaries.
46. In the present case we were informed that there are no time records and that there is no information as to what was considered at each trustees' meetings. As appears from the judgment of Sir John Chadwick, the onus of showing that some of the fees of the non-executive trustees related to advice for the exclusive benefit of income beneficiaries rests on the trustees.