Revision notes for disposition of equity interests for Trusts and Equity. These notes got me a high 2:1 in Trusts and Equity. Clearly maps out everything you need to know to answer disposition of equitable interests exam questions. Includes assigning interests to third parties directly, directing t...
Dispositions must comply with s53(1)(c) Law of Property Act 1925
(c) a disposition of an equitable interest or trust subsisting at the time of the disposition, must be in
writing signed by the person disposing of the same, or by his agent thereunto lawfully authorised in
writing or by will.
Stamp duty charged on transfer of beneficial interest, people try to avoid this by avoiding their
action being classed as a disposition.
4 ways you can dispose of interest summed up by Romer LJ in Timpson’s executors
1) Assign interest to third party directly
2) Direct trustees to hold property on trust for another
3) Contract for valuable consideration to reassign equitable interest
4) Declare themselves a trustee for another (subtrust)
Not exhaustive list but most attempts to avoid stamp duty come under
one of these.
Assign interest to third party directly
Always a disposition, void if not in writing
Direct trustees to hold property on trust for another
Grey v IRC – Grey orally told trustees to hold trust property for
grandchildren by adding trust shares to pre-existing trusts. This
part was an attempted disposition which would have failed if
left unwritten. Trustees made 6 declarations of trust stating
allocation of trusts. This meant disposition wasn’t void but was
subject to stamp duty.
Contract for valuable consideration to reassign equitable interest
Oughtred v IRC – shares held for Mrs Oughtred for life and for her son Peter absolutely. Oral
agreements that Mrs Oughtred would transfer other shares in return for P’s revisionary interest in
the shares. This could possibly have caused P to be holding the reversionary interest in shares on
constructive trust for O. Documents of transfer were created later. Not necessary to find whether
the equitable interest was transferred when documents were created or when constructive trust
created as this was under Stamp Act 1891. But Denning said oral agreement was not sufficient to
transfer the interest, Radcliffe (dissenting) thought it was sufficient, though both obiter.
Neville - shareholders in company called JEN claimed to have oral agreement with JEN that JEN’s
shares in another company would be distributed to shareholders of JEN. Found oral agreements
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