IRC v Blackwell [1925] 10 TC 235

Rowlatt J

• It is income which is held in trust for him in the sense that he will ultimately receive it, but it is not in trust for him in the sense that the trustees have to pay the income to him year by year while he is an infant. All the minor can get while he is an infant is such amount as the trustees allow for his maintenance. 

• This case is quite different from a case where the infant has the right to the money now but where the money remains in the hands of his trustees not because of any directions in the will which directed it to be accumulated, but because he is an infant and cannot give a good receipt for it, and it therefore remains in the hands of his trustees. In that case the income would be the income of the infant now, although he could not touch it. 

• But where the will expressly provides that the surplus income shall be accumulated and only allows the trustees to spend what they think proper on the minor's maintenance it is not the income of the minor yet. 

• Drummond v Collins supports that view; there are expressions in the opinions of the learned Lords which, in my judgment, point to this conclusion, that it is only when the discretion of the trustees is exercised, so as to give the infants a portion of the income which was being accumulated for them, that the liability to income tax attaches.

RELATED CASES

• Drummond v Collins