· B who is entitled to the income of a trust as it arises (or is entitled to have it applied for his benefit) is subject to income tax for the year in which that income arises, even if none of the money is paid to him during that year.
· Lady AS received income out of the “pool” of trust income. Dividends had not been mandated to her as in Williams v Singer. The proper law of the trust was that of New York. Lady AS was UK resident.
· The Crown argued successfully that Lady AS had the absolute right to the dividends as soon as they came into the hands of the trustees. Lady AS was therefore liable and her husband was properly assessed.
· Rowlatt J considered that Williams v Singer constrained him from deciding otherwise. The CA reversed this but the HL upheld the assessments by 3:2.
· Lord Carson
· In considering sums placed in the hands of trustees for the purpose of paying income to beneficiaries for the purposes of the Income Tax Acts you may eliminate the trustees. This income is income of the beneficiaries.
· Smith: supports idea that looking through the trust- if we don’t tax beneficiary shouldn’t tax trustee.
· Shipwright and Baldry: the main importance of the case today is that it shows that the rights of beneficiaries and duties of trustees are to be determined under the proper law of the settlement.