CG20700 - Funds in Court: England Wales and Northern Ireland
S61 deals with funds in court. These are funds controlled by the Courts of Justice for the benefit of suitors such as infants and those who lack capacity. For capital gains purposes, the Accountant General of the Supreme Court of Judicature is to be treated as holding the funds as nominee for the persons entitled to or interested in the funds. Gains on disposals of assets held in such funds are therefore chargeable on those persons.
The term 'funds in court' means the following:
- Money in the High Court, a County Court or such other courts and tribunals as the Lord Chancellor may prescribe as provided in s38 Administration of Justice Act 1982.
- Statutory deposits described in s40 Administration of Justice Act 1982. An example is the deposit required from registered friendly societies carrying on industrial assurance business.
Part VI of the Administration of Justice Act 1982 replaced the earlier Administration of Justice Act 1965. S61 applies to Funds in Court under both the 1965 and the 1982 Acts.
Common investment funds
S42 of the Administration of Justice Act 1982 gives the courts discretion to invest funds in court in one of the common investment funds. These are referred to in s61 and s100 as 'court investment funds'. These common investment funds are comparable to unit trusts. The value of a share in one of them is determined by the total value at the relevant time of the underlying securities. The only person entitled to hold shares in such funds is the Accountant General of the Supreme Court of Judicature who holds them on behalf of the individual beneficiaries. Dividends on the shares are payable at six monthly intervals. Gains on disposals are not chargeable gains of the fund.
For administrative convenience, the Accountant General has the power to reallocate between suitors the shares which he holds in a common investment fund. Funds received for a new suitor may be used to pay off another to whom money is due. The necessary transfer of shares may be made by a book entry. S61(3) provides that such reallocations of shares are to be treated for capital gains purposes as an acquisition on behalf of one suitor and a disposal on behalf of the other.