Gartside's Will Trusts, Re

Parliamentary Archives,
HL/PO/JU/4/3/1154

HOUSE OF LORDS

GARTSIDE AND ANOTHER

v.

COMMISSIONERS OF INLAND REVENUE

Lord Reid

Lord Morris

of

Borth-y-Gest

Lord Hodson
Lord Guest

Lord
Wilberforce

Lord Reid

MY LORDS,

Thomas Gartside, the testator, died in January 1941. He left four children
and this case is concerned with the share of his estate which he bequeathed
for the benefit of his son John and his family. With regard to that share
he provided that it should be held by his trustees:

" Upon trust during the lifetime of my son John Travis Gartside to pay
" or apply the whole or such part as my trustees shall in their absolute
" and uncontrolled discretion think fit of the income of such fourth
" share for or towards the maintenance support or otherwise for the
" benefit of my said son John Travis Gartside or during his life for his
" wife or children (if any) or any one or more exclusively of the other
" of others of them in such manner in all respects as my trustees shall in
" their absolute and uncontrolled discretion without being liable to
" account think fit and shall accumulate the surplus (if any) of the said
" income by investing the same and the resulting income thereof in
" manner hereinafter mentioned. To the intent that the accumulations
" shall be added to the fourth share and follow the destination thereof
" with power nevertheless for my trustees at any time to resort to the
" accumulations of any preceding year and apply the same for the
" maintenance support and benefit of my said son John Travis Gartside
" or (during his life) any wife or children of his or any one or more
" of them."

When the testator died John was unmarried. The next year he married
and he had two sons, twins, born on 5th January, 1945. His wife and two
sons survived during the period relevant to this case.

John died on 8th May, 1963, and the present case raised the question
whether estate duty is payable on his death in respect of sums which the
testator's trustees had advanced to his twin sons prior to his death.

From the testator's death until 1960 his trustees accumulated the whole
income of John's share by virtue of the provision which I have already quoted.
In 1961 they paid out of income sums of £786 for the benefit of John and
of £50 for the benefit of his wife and accumulated the balance. By 1st
January, 1962, the total accumulated income amounted to about £55,000.

On 2nd January, 1962, when the twin sons were nearly seventeen years of
age the trustees, by virtue of a power to advance, executed two deeds poll
whereby they declared that certain investments should be held in trust for
each of the twin sons if he attained the age of twenty-one years. These two
advances together amounted to nearly half the trust funds, apart…