Bare trusts: asset pooling arrangements: shares: Booth v Ellard
Sometimes owners of property may enter into arrangements under which it is held by trustees in a pool. An example is Booth v Ellard, 53TC393. In this case shareholders in a company transferred their shares to trustees to hold for their mutual benefit, largely to enable a collective defence to be put forward against a takeover. The trustees exercised voting power on all the shares in accordance with a majority vote. The Court of Appeal held that this was a bare trust within TCGA92/S60. Therefore Mr Booth had not made a disposal to the trustees.
In Booth v Ellard the shareholders were entitled to the same number of shares as they had put in to be returned to them. Therefore it seemed clear to the Court that there was no real disposal. The right of the trustees to deal with the shares did not prevent it from being a bare trust.