West v Federal Commissioner of Taxation

The case of *West v Federal Commissioner of Taxation* concerned an appeal to the High Court of Australia regarding the assessment of Federal estate duty. The appellant, Reginald William West, as administrator of the estate of Helen Amelia Weston, deceased, objected to the inclusion of certain settled property in the dutiable estate. The Commissioner of Taxation had included the value of a share in a trust estate, settled by an indenture executed prior to the deceased's marriage, on the basis that it constituted property comprised in a settlement made by the deceased under section 8(4)(c) of the *Estate Duty Assessment Act 1914-1928*.

The legal issue before the High Court was whether the property subject to the 1911 indenture of settlement was properly included in the deceased's dutiable estate. Specifically, the court had to determine if the settlement was "made by the deceased person" within the meaning of section 8(4)(c) of the Act, given that the deceased had a life interest in the settled property. This required the court to construe the provisions of the deceased's father's will and the terms of the settlement indenture itself.

The High Court held that the Commissioner was incorrect in including the settled property in the deceased's dutiable estate. The court reasoned that the relevant provision in the testator's will, stating "it is my will and desire that the share... shall be by deed settled and assured," imposed an imperative trust on the trustees to execute the settlement. The deceased's interest under the will was an entitlement to income for life, but she did not possess title to the corpus of the property that was settled. The settlement was therefore executed by the trustees in fulfilment of their duty under the will, not by the deceased as a settlor. The deceased's concurrence in the indenture, while necessary for the settlement to take effect as intended by the will, did not constitute her as the maker of the settlement for the purposes of the Estate Duty Assessment Act.

Consequently, the question submitted to the Full Court was answered in the negative. The property comprised in the settlement was not deemed to be part of the deceased's estate for the purposes of estate duty because it was not a settlement made by her.