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HMRC internal manual

Trusts, Settlements and Estates Manual

Trust management expenses: ‘properly chargeable to income’ in general trust law: HMRC v Peter Clay: ‘the whole estate’

The Court of Appeal decision in HMRC v Peter Clay looks more closely at the meaning of ‘the whole estate’ as used in Carver v Duncan.

Sir John Chadwick said ‘In the light of those passages in the judgments in Bennett and the speech of Lord Templeman in Carver v Duncan it is, I think, beyond argument that an expense is incurred “for the benefit of the whole estate” in the present context when the purpose or object for which that expense is incurred is to confer benefit both on the income beneficiaries and on those entitled to capital on the determination of the income trusts. The expression ‘expenses incurred for the benefit of the whole estate’ must be understood in that sense.’