Commissioners of Inland Revenue v Buchanan
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SELLERS |
| Judgment Date | 13 March 1957 |
| Judgment citation (vLex) | [1957] EWCA Civ J0313-4 |
| Court | Court of Appeal |
| Date | 13 March 1957 |
[1957] EWCA Civ J0313-4
In The Supreme Court of Judicature
Court of Appeal
The Lord Chier Justice of England
Lord Justice Jenkins and
Lord Justice Sellers
MR JOHN PENNYCUICK, Q.C., MR E.B. STAMP and SIR REGINALD HILLS (instructed by the Solicitor of Inland Revenue. Somerset House, Strand, W.C.2.) appeared as Counsel on behalf of the Appellants.
The HON. CHARLES RUSSELL, Q.C., and MR H.H. MONROE (instructed by Messrs. Travers Smith, Braithwaite & Co., 4, Throgmorton Avenue, E.C.2.) appeared as Counsel on behalf of the Respondent.
THE LORD CHIEF JUSTICE OF ENGLAND: This is an appeal from a judgment of Mr Justice Vaisey who dismissed an appeal from a decision of the Special Commissioners given in favour of the Respondent, Major Buchanan, though on a different ground. The question that is raised is whether Major Buchanan, who was then the husband of Lady Dufferin, is liable to surtax as her husband (her income, of course, being aggregated with his for surtax purposes) and whether, he being, as I say, liable to surtax, there must be brought into the computation sums of money which were paid to the children of Lady Dufferin by her first marriage by reason of the conditions of section 21 of the Finance Act, 1936.
I shall state the facts as shortly as I can. Lady Dufferin was the grand-daughter of the first Lord Iveagh who divided his property into three shares giving one share to each son; one of the sons, Mr Arthur Guinness, was Lady Dufferin's father. Lord Iveagh died on the 7th October, 1927, his will being proved on the 2nd November, 1927; under that will the sons took a life interest in their share and then the life interest passed to the children and the children's children who were living at the time of Lord Iveagh's death, so Lord Iveagh's grandchildren got an interest.
On the 8th March, 1948, the will having been proved in November, 1927, Lady Dufferin executed a deed of surrender under which she surrendered any interest in the one-third share which she would have in her father's share, because Mr Arthur Guinness had three children; she surrendered any share that she might have in that share which would come from her father. She, of course, at the time when she executed this deed of surrender, had not got a life interest in possession, because her father was still alive, but, on the day following the surrender which she executed, her father, Mr Arthur Guinness, surrendered his interest which would have passed to Lady Dufferin but for the surrender which she had executed. The result of it was that the persons who became entitled under the terms of Lord Iveagh's will – which I will mention in a moment – were Lady Dufferin's children. Under Lord Iveagh's will, it was provided that if any of these beneficiaries who had a life interest attempted to dispose of his life interest, the life interest was forfeited, subject to this exception and provision: "Any such life tenant" may at any time surrender such life interest or any part thereof to or in "favour of the person or any one or more of the persons who would be entitled thereto or to some share thereof or of the trust premises in" which it subsists" -,...
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