STAMP DUTY.

Press, Volume LXVIII, Issue 20491, 9 March 1932, Page 13

STAMP DUTY.

CLAIM BY COMMISSIONER. APPEAL TO FULL COURT. (PBESS ASSOCIATION TELEGBAIt;) WELLINGTON} MaTch 8. A question, as to whether a' deed of settlement duly executed by the settlor fourteen years ago, upon which gift duty was duly -paid, and under which the beneficiaries entered into the enjoyment of income and paid income tax, can be treated as nugatory on behalf of the Commissioner of Stamp Duties because the settled fund still remained vested in the settlor at the tiipe of his death, as the securities representing the sapie had "never been transferred, occupied, the attention of the Pull Court today in the case of Gould and others against the Commissioner of Stamp Dutiesr Plaintiffs, George Gould, Herbert Elworthy, and George Ranald Macdonald, are trustees of the estate of Ranald Macintosh Macdonald, who died at Christchurch on October 21st, 1928, leaving an estate, the final 'balance Of which was fixed for death duties at £337,317. Case for Plaintiffs. Counse} for plaintiffs said that in 1915 the settlor, with his wife and five children, went to England, remaining there till July, 1919. In May, 1918, at the instructions of the settlor, his attorneys in New Zealand executed in favour of the five children a deed of settlement over the sum of £30,000 in certain proportions. On May 20th, 1920, the settlor himself executed a further deed adding an addition of £15,000 to the settlement. Later £1750 was also added. Although transfers were made in. the books of the settlor transferring from his capital account to the accounts of the various beneficiaries the amounts given them,"the securities which represented the, settled fund; were never actually transferred to the trustees of the settlement, but remained in the name of the settlor till the time- of his death. It was contended for plaintiffs that, in spite of the fact that there 1 had been an actual appropriation .of securi-. ties to the settlement, on Mr Macdonald's death, the Commissioner of Stamp Duties. sought to include the settled fund in the estate 5 at:the- settlor and assess duty thereon on the ground that the settlement had never been carried: into effect. , ' v Continuing his argument, counsel for the plaintiffs submitted that tie fact that there was no transfor pf.the securities to the trustees was immaterial, as the settlor by his acts and conduct had* constituted himself the trustee of the whole fund until such time . as the transfer of the securities could'be made to the trustees. The deed of settlement, coupled with: the subsequent declaration, amounted to a valid declaration of trust, preventing the settlor from suing for the return of the mortgages or using the property as his own. The false recital by the settlor that he had paid and the false acknowledgment by him .as the trustee that he had received the money constituted him the trustee of the "sum of £3ojooo, no specific allocation being necessary Even when all the formalities had not been complied with the Court should give effect to the clear intention of the settlor to ieclare a trust for hi» children. Commissioner's Contentions. The Solicitor-General, far the Commissioner of Stamp Duties, submitted that the truqt fund must be liable for the payment 3i death duties, as neither the trustees nor the beneficiaries had assumed possession and enjoyment of the trust fund three years before the death of the settlor. Mr Macdonald had never had any intention of declaring himself or any other person the trustee 1 of the specific trust fund. He could at any time have compelled his attorneys to deliver up the securities to him, and no action could have been taken against him for payment of the moneys promised. He contended that the false recital in the deed that the moneys had been paid and received could not constitute the settlor a trustee, as both parties could go behind the deed and show what was the actual state of affairs. The trust was not validly created, as the legal interest in the trust fund had not been transferred to the trustees. The Court adjourned until .to-morrow.