- (1.) THIS is an appeal by the Commissioners of Inland Revenue from a judgment off Danckwerts J. dated July 29, 1958, in proceedings brought against them by the present trustees of the will of William Munro Tapp, deceased, for the determination by the court of a question concerning the estate duty payable on the death of Arthur Gerard Sentance Tapp (hereinafter called 'the deceased') in respect of his interest under a trust contained in the testators will for the payment out of the income of the trust fund thereby constituted of an annuity of pounds 3,000 to three named beneficiaries, including the deceased (who was the second of the three to die), or such one or more of them as should for the time being be living, and if more than one in equal shares.
(2.) THE question in the appeal is whether, having regard to the terms of this trust, there was, on the death of the deceased, a passing under section 1 of the Finance Act, 1894, of property, in the shape of the share original an accruing of the annuity to which he was entitled at the time of his death, and which then became payable for life to the last survivor of the three named beneficiaries, to be valued actuarially as at his death; or whether such share constituted an interest ceasing on his death in property in the shape of the trust fund out of the income of which the annuity was payable, so as to give rise to a notional passing under section 2(1)(b) of a 'slice' of the capital of the trust fund to be valued in accordance with section 7(7)(b). The will is dated June 16, 1933. The testators wife named in the will died in his lifetime. After her death he married again and in contemplation of such remarriage he made a codicil dated September 23, 1935, by which (so far as material for the present purpose) he confirmed his will. the testator died on January 23, 1936, and his will and codicil were duly proved on May 7, 1936.
(3.) THE only provisions of the will to which it is necessary to refer for the present purpose are those contained in clause 9. By that clause the testator made a general residuary devise and bequest to his trustees upon trusts for conversion and investment and directed his trustees to hold the resulting investments and the investments from time to time representing the same (thereinafter referred to as his trust fund) upon trust to pay out of the income thereof to his wife Kate Garrett Tapp (who predeceased him) during her life the annual payment therein mentioned 'and out of the remainder of such income to pay the following annual payments videlicet (a) the sum of pounds 1,500 per annum during the life of my said wife Kate Garrett Tapp and after her death the sum of pounds 3,000 per annum to my sister Catherine Alway my nephew Arthur Gerard Sentance Tapp' (the deceased) 'and my niece Phyllis Fawell or such one or more of them as shall for the time being be living and if more than one of them shall be living to be received by them in equal shares.';