Futter & Anor v Futter & Ors [2010] EWHC 449 (Ch) (11 March 2010)

Futter & Anor v Futter & Ors [2010] EWHC 449 (Ch) (11 March 2010)

The trustees' failure to consider section 2(4) TCGA 1992 and the resulting tax consequences was a material omission. Had they known the true position, they would not have executed the deeds. Under the Hastings-Bass principle, the deeds are void as invalid exercises of trustee powers.

Citation
[2010] EWHC 449 (Ch)
Parties
Claimant: Mark Stephen Futter; Claimant: Clive Donald Cutbill; Defendant: Elizabeth Gaye Futter; Defendant: Adam Jacob Futter; Defendant: James Daniel Futter; Defendant: Natalie Helen Futter; Defendant: The Commissioners for HM Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
11 March 2010
Procedural Posture
Chancery Trusts / First Instance Judgment
Outcome
Claim allowed
Legal Topics
Exercise of Trustee Powers, Hastings Bass Rule, Capital Gains Tax, Mistake in Trust Administration
Equity and Trusts Taxation Exercise of Trustee Powers Hastings Bass Rule Capital Gains Tax Mistake in Trust Administration

Case Brief

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Parties

Mark Stephen Futter

Claimant

Clive Donald Cutbill

Claimant

Elizabeth Gaye Futter

Defendant

Adam Jacob Futter

Defendant

James Daniel Futter

Defendant

Natalie Helen Futter

Defendant

The Commissioners for HM Revenue and Customs

Defendant

Procedural Posture

Chancery Trusts / First Instance Judgment

Legal Issues

  1. 1 Whether the trustees' exercise of powers under the Futter (No.3) and (No.5) Life Interest Settlements was invalid under the Hastings-Bass rule due to failure to consider relevant tax consequences
  2. 2 Whether the resulting deeds are void or voidable

Ratio Decidendi

The trustees' failure to consider section 2(4) TCGA 1992 and the resulting tax consequences was a material omission. Had they known the true position, they would not have executed the deeds. Under the Hastings-Bass principle, the deeds are void as invalid exercises of trustee powers.

Court Disposition

Claim allowed

Orders

  • Deed dated 31 March 2008 and deed dated 3 April 2008 declared void ab initio.
  • Property transferred under the void deeds to be returned to the trustees and accounted for as part of the trust fund.