“7 Recoverable amount (1) The recoverable amount for the purposes of section 6 is an amount equal to the defendant's benefit from the conduct concerned. (2) But if the defendant shows that the available amount is less than that benefit the recoverable amount is— (a) the available amount, or (b) a nominal amount, if the available amount is nil.”
“ 9 Available amount (1) For the purposes of deciding the recoverable amount, the available amount is the aggregate of— (a) the total of the values (at the time the confiscation order is made) of all the free property then held by the defendant minus the total amount payable in pursuance of obligations which then have priority, and (b) the total of the values (at that time) of all tainted gifts.”
“I agree and find that this is a closed class of [Beneficiaries]; that the Trustees cannot alienate capital away from him and that he, the defendant, cannot be excluded and, therefore, he will, undoubtedly, receive at least one third of the capital at some time in the future. This issue, whether I can or cannot include that expectation of benefiting from the trust at some future stage, really turns on the meaning of words in section 9 of the Act; namely, whether he holds that asset today, “then held.”
“As to that, there are, it seems to me, two possible conclusions. The first is that the power of appointment under clause 2 not having been exercised, the three sisters on reaching that age acquired interests in possession defeasible should the trustees decide to exercise their power to accumulate income. They were then entitled absolutely to the capital and income of the trust fund in equal shares subject to the exercise of that power. The second is that they never secured an interest in possession for they never acquired on reaching that age the right to the enjoyment of anything. Their enjoyment of any income from the trust fund depended on the trustees’ decision as the accumulation of income, They would only have a right to any income from the trust fund if the trustees decided it should not be accumulated or if they failed to agree that it should be or if they delayed a decision on this matter for so long that a decision then to accumulate and withhold income from the sisters would have been unreasonable.”
“Clause 3 (a) gives the trustees power to accumulate as they think fit and the sisters’ entitlement depends on whether that power is exercised.”
“In my opinion the words “interest in possession” in Schedule 5 should be given their ordinary natural meaning which I take to be a present right of present enjoyment and as in my view the sisters on attaining 21 did not obtain that, this appeal should succeed and paragraphs 1 and 2 of the commissioners’ determination should be upheld.”
“In the present case Fiona certainly did not have an absolute right to any income of the property as it accrued. At that moment her entitlement was qualified by the existence of the trustees’ power of accumulation, to the effect that she had no immediate right to anything, but only a right to later payment of such income as the trustees, either by deliberate decision or by inaction for more than a reasonable time, did not cause to be subjected to accumulation.”
“The power to accumulate under clause 3 (a) of the settlement is a power over income which is already in the hands of the trustees. When they receive the income they have a reasonable time in which to decide whether to accumulate it or not. Only if they decide not to accumulate it or they fail within a reasonable time to accumulate it are the principal beneficiaries entitled to the income, that is, to demand payment of the income….Accordingly in the present case Fiona and Serena were not entitled to demand payment as soon as the trustees received income. The position is the same as if clause 3 contained a power to use income to maintain the three beneficiaries and a trust to accumulate the balance....”
“These provisions show that Parliament distinguished between the administration of a trust and the dispositive powers of trustees and in my opinion there is a very real distinction. A life tenant has an interest in possession but his interest only extends to the net income of the property, that is to say, after deduction from the gross income of expenses etc. properly incurred in the management of the trust by the trustees in the exercise of their powers. A dispositive power is a power to dispose of the net income. Sometimes the line between an administrative and a dispositive power may be difficult to draw but that does not mean that there is not a valid distinction. In the present case the revenue contended that the power given by clause 21 to apply income towards the payment of duties, taxes etc. which but for the provisions of the clause would be payable out of or charged upon capital was a dispositive power and that this clause alone would prevent the sisters having an interest in possession on reaching 21. I do not think that this is so. I think this clause falls on the administrative side of the line and merely elucidates the meaning to be given to clause 14.”
“The discussion thus far assumes that the assets comprised in the settled fund actually produce income. But what if an asset is non-income producing, for instance a life insurance policy or a capital growth bond which pays no dividend or an interest-free loan which has been made out of the trust assets in favour of the income beneficiary? The answer is that the ‘present right to present enjoyment’, which is the defining characteristic of an interest in possession, includes the right to call for the income, if any [my emphasis], of the settled property and that a beneficiary who would be entitled to call for the income of the settled property if it produced any [my emphasis] is entitled to an interest in possession in such property.”