Wrightson v Commissioners of Inland Revenue
| Jurisdiction | England & Wales |
| Judge | Earl Jowitt,Lord Keith of Avonholm,Lord Reid,Lord Morton of Henryton,Lord Radcliffe |
| Judgment Date | 04 July 1957 |
| Judgment citation (vLex) | [1957] UKHL J0704-2 |
| Date | 04 July 1957 |
| Court | House of Lords |
[1957] UKHL J0704-2
House of Lords
Earl Jowitt
Lord Morton of Henryton
Lord Reid
Lord Radcliffe
Lord Keith of Avonholm
Upon Report from the Appellate Committee, to whom was referred the Cause Westminster Bank Limited against Commissioners of Inland Revenue, that the Committee had heard Counsel, as well on Monday the 25th, as on Tuesday the 26th, Wednesday the 27th and Thursday the 28th, days of March last, upon the Petition and Appeal of Westminster Bank Limited, of Lothbury, in the City of London, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 21st of February 1956, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the printed Case of the Commissioners of Inland Revenue, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal, of the 21st day of February 1956, complained of in the said Appeal, be, and the same is hereby Reversed, and that the Question in the Originating Summons be answered in the Negative: And it is further Ordered, That the Respondents do pay, or cause to be paid, to the said Appellants the Costs incurred by them in the Courts below, and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Chancery Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.
Upon Report from the Apellate Committee, to whom was referred the Cause Wrightson and another against Commissioners of Inland Revenue, that the Committee had heard Counsel, as well on Monday the 25th, as on Tuesday the 26th, Wednesday the 27th and Thursday the 28th, days of March last, upon the Petition and Appeal of Sir John Garmondsway Wrightson, of Neasham Hall, near Darlington, in the County of Durham, Baronet, and Oliver Wrightson, of Victoria Buildings, 46 Grainger Street, Newcastle-upon-Tyne, in the County of Northumberland, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 21st of February 1956, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the printed Case of the Commissioners of Inland Revenue, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal, of the 21st day of February 1956, complained of in the said Appeal, be, and the same is hereby Reversed, and that the Question in the Originating Summons be answered in the Negative: And it is further Ordered, That the Respondents do pay, or cause to be paid, to the said Appellants the Costs incurred by them in the Courts below, and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Chancery Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.
My Lords,
I have had the advantage of reading in print the speech about to be delivered by my noble and learned friend. Lord Morton of Henryton, with which I agree.
My Lords, in the Wrightson case I reach the same result. I had at first some doubt whether this case could not be distinguished from the case of the Westminster Bank on the view that no beneficial interest accrued or arose in the policies to anyone until the death of the settlor. I am now satisfied, however, that from the time the policies were assigned to the trustees there was a beneficial interest in the policies in the group of persons who were ultimately to take as life tenants on the death of the settlor and that this beneficial interest remained unchanged in character from the date of the settlement. The case is accordingly, in my opinion, indistinguishable from the case of the Westminster Bank. I would allow the appeal.
My Lords,
The facts in this case have already been sufficiently stated. I only note (1) that the four several policies of assurance were assigned by the settlor to the bank, as trustee of the settlement, at the same time that there was paid to the bank as trustee the sum of £12,000; (2) that the policies were at the date of the settlement fully paid; (3) that the settlor retained no interest in the policies and that they were assigned more than five years before his death; (4) that the policies were payable on the death of the settlor; and (5) that, apart from a direction in clause 2 of the settlement that death duties "if any" in respect of the policies and the expenses of ingathering the proceeds of the policies should be paid out of these proceeds, and a direction in clause 4 that the policies and their proceeds were not to be treated as income bearing until the amounts payable in respect thereof shall have been received and invested, no distinction was made as to the purposes to which the policies, the sum of £12,000, and their fruits should be applied.
A question was raised whether a policy of assurance could be an interest provided by a settlor within the meaning of section 2 (1) ( d) of the Finance Act, 1894. I agree with the opinions already expressed that an interest provided can take the form of a policy of assurance and I do not have anything to add on this point.
The other question for determination is whether under the terms of the settlement a beneficial interest has accrued or arisen by survivorship, or otherwise, on the death of the settlor, in the policies, (an interest provided by the settlor), within the meaning of section 2 (1) ( d) of the Finance Act, 1894. I draw no distinction between the policies and their proceeds. If a beneficial interest arose in the proceeds at the death, it arose, I think, in the policies at the death, and if it did not arise in the policies at the death, it could not, as I see it, arise in the proceeds at the death. This, I should have thought, was clear, because the first thing to look for is the interest provided by the settlor. The settlor cannot, as I see it, provide two things which have to be separately considered—(1) the policies, and (2) the proceeds. Whatever he provided he provided at the date of the settlement and that was undoubtedly the policies, but inherent in the policies was the right to obtain the sums covered by the policies at the due date. So when it is said he provided the policies it can also be said he provided the proceeds produced by the policies. These are two ways of saying the same thing. What did the settlor put in trust? Surely the policies. If not, how could the trustees realise the policies? When the settlor died there were no proceeds in existence but there were policies in existence by virtue of which the trustees were enabled to obtain the proceeds. If the policies are to be distinguished from the proceeds I have difficulty in seeing how a beneficial interest can ever accrue or arise by survivorship, on the death, in the proceeds, because the proceeds are not there at the death. I would observe also that it is the interest provided that is to be deemed to pass at the death, but the value of this interest is quantified, for the purposes of duty, by the extent of the beneficial interest accruing or arising by survivorship at the death. This is noted, for example, by my noble and learned friend Lord Morton of Henryton in D'Avigdor-Goldsmid v. Inland Revenue Commissioners [1953] A.C. at page 368 in commenting on Dobree's case, by Lord President Normand and Lord Fleming in Tennant's Trustees v. Lord Advocate, 1938 S.C. 224, and by the Court of Appeal in Westminster Bank Limited v. Attorney-General [1939] 1 Ch. at page 619. If no beneficial interest accrues or arises by survivorship on the death, then the interest provided, even if it is assumed to pass at the death, attracts no liability to duty. In short, the beneficial interest must be in the interest provided, which, in this case, in my opinion, is the policies with all the rights inherent in the holding of that particular type of asset. If there is no beneficial interest in the policies arising by survivorship on the death, there is no liability to duty. No point was taken on the words "or otherwise" in the statute, so attention may be confined to the words "by survivorship".
My Lords, I can see no reason for thinking that a beneficial interest accrued or arose in the insurance policies or their proceeds at a different time from the beneficial interest that accrued or arose in the sum of £12,000, or its accumulations. There is accordingly no room, in my opinion, for holding that a beneficial interest accrued or arose in the policies by survivorship of...
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