Introduction Flashcards
Who holds the legal interest in a trust?
The trustee
Who holds the equitable interest in a trust?
The beneficiary
What is a chattel?
A tangible item (other than land)
What is chose in action?
An intangible right such as debt or a company share
What happened in the case Customs and Excise Commissioners v Richmond Theatre Management Ltd [1995]?
A theatre sold advance tickets for performances. Terms and conditions stated that the company would hold the purchase money ‘upon trust’ for the customer until the performance took place, and return money if it was cancelled. No restrictions on how the company could use the money and was not required to account to the customers - not a trustee, ability to freely use money incompatible with a trust
What happened in the case Re Bond Worth [1980]?
The ability for a company to use fibres in its manufacturing process was inconsistent with the company holding the fibres on trust for the unpaid seller of them - not a trust
Name 6 benefits of using a trust
Separation of ownership and management of property, expertise, protection, flexibility, control and ring fencing insolvency
Who can a beneficiaries equitable proprietary interest be enforced against?
Third parties
Name 3 broad key uses for trusts
Commercial arrangements, private arrangements charitable purposes
Name 5 examples of commercial arrangements
Share ownership, investment funds, pension funds, other forms of tax efficient employee remuneration, corporate tax avoidance
Name 3 examples of private arrangements
Testamentary planning, land ownership, tax planning
Name 2 types of implied trusts (arising by operation of law)
Resulting trusts, constructive trusts
What are statutory trusts?
Trusts arising as the result of the application of a specific statutory rule
What are testamentary trusts?
Trusts created via a will
What are inter vivos trusts?
Trusts created in the lifetime of the settlor
What are fixed trusts?
Where the trustee knows exactly what they need to give to each beneficiary
What are discretionary trusts?
Where the trustee knows who the potential beneficiaries are but has the power to determine who benefits and in what shares
What is a bare trust?
Where the trustee simply holds the legal title on trust for the sole benefit of the beneficiary
What did the House of Lords state in the case Foley v Hill [1848]?
That a bank is not a trustee of money deposited by it’s customers
What is a quistclose trust?
A device that combines a debt and a trust
Which case did the quistclose trusts come from?
Barclays Bank Ltd v Quistclose Investments Ltd [1970]
What happened in the case Re Farepak Food and Gifts Ltd (in administration) [2006]?
Farepak ran a Xmas savings scheme, agreeing with customers that in return for 11 monthly payments it would obtain retail vouchers for customers and distribute in Nov. Farepak went into admin. In Oct. Course concluded money paid to Farepak was not subject to a quistclose trust
In what circumstances can quistclose trusts arise?
In any situation where property is transferred to a person whose use of the property is restricted to a specific purpose
