Innes (HM Inspector of Taxes) v Harrison
| Jurisdiction | England & Wales |
| Judgment Date | 11 March 1954 |
| Date | 11 March 1954 |
| Court | Chancery Division |
HIGH COURT OF JUSTICE (CHANCERY DIVISION)-
Income Tax - Title to income - Whether trust void for uncertainty - Whether trust infringes rule against perpetuities.
Under a deed of 1st May, 1949, the settlor covenanted for a specified period ending on 31st March, 1959, or his earlier death to pay monthly sums to trustees; the trustees were directed to pay or apply the moneys so paid to or for the benefit of such one or more of the objects of the trust in such shares (if more than one), at such time or times and in such manner as the trustees in their absolute discretion should from time to time think fit.
The expression "objects of the trust" was defined to mean and include such of the following individuals (but not including the settlor or any wife of his) as should from time to time during the specified period be living:
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(i) relatives of the settlor (including in particular the children of the settlor's daughters);
(a) individuals who had at any time been or were at the date of the deed or should at any time during the specified period be employed by any company of which the settlor was at the date of the deed or should at any time during the specified period be a director, and
(b) relatives of those individuals; and
(ii) such other individuals as the settlor should from time to time name by deed.
The expression "relatives of the settlor" was defined to mean and include all the descendants of the settlor's grandparents (other than the settlor himself) and the wives and husbands of such descendants (other than any wife of the settlor). The expression "relatives" in relation to any person other than the settlor was defined to mean and include all the descendants of such person's grandparents (other than such person himself or herself) and the wives and husbands of all such descendants (including any wife or husband of such person himself or herself).
The Respondent, whose wife was a daughter of the settlor, claimed repayment of Income Tax on behalf of their infant son in respect of a sum paid to the son by the trustees of the deed. The Inspector of Taxes objected to the claim on the ground that the deed was void for uncertainty and the income payable thereunder was income of the settlor under a resulting trust. On an appeal the General Commissioners did not consider themselves required or competent to decide whether the deed was void for uncertainty and held that it provided for the payment of sums of money by the settlor to trustees, and that the recipients of those moneys from the trustees were entitled to claim repayment of personal allowances. The Crown demanded a Case.
In the Chancery Division the further point was taken on behalf of the Crown that the trust under the deed offended against the rule against perpetuities.
Held, that the Respondent was not entitled to the repayment claimed, since the trust under the deed was void for uncertainty and also because it infringed the rule against perpetuities.
Stated under the Income Tax Act, 1952, Section 64, by the Commissioners for the General Purposes of the Income Tax for the Desborough Division in the County of Buckingham for the opinion of the High Court of Justice.
1. At a meeting of the Commissioners for the General Purposes of the Income Tax acting in and for the Division of Desborough aforesaid held at 43, High Street, Marlow, Bucks, on 26th February, 1952, John Savory Harrison as parent and on behalf of Giles John Chalmers Harrison appealed under the terms of Section 27 (5), Income Tax Act, 1918, against an objection by the Appellant to a claim for repayment of tax for the years 1949-50 and 1950-51 in respect of payments made to the said Giles John Chalmers Harrison under the terms of a deed of settlement hereinafter referred to.
2. The following facts were admitted:-
(2) By a deed of settlement dated 1st May, 1949, made between Henry Rupert Hood Barrs (thereinafter and hereinafter called "the settlor") of the one part and trustees therein named of the other part, the said Henry Rupert Hood Barrs covenanted to pay to the trustees on due dates the annual sum of £2,000 for the objects of the trust set out in the said deed.
(3) The first object of the trust provides for the payment to the children of the settlor's three daughters of a sum of not less than £50 per...
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