In Futter & Cutbill v HMRC (Supreme Court – 9 May) the trustees of two discretionary trusts exercised powers of advancement with the intention of transferring assets out of the settlements in such a way as to avoid incurring a charge to CGT. However the trustees and their solicitors had overlooked the provisions of TCGA 1992 s 2(4) (which provides that allowable losses cannot be set off against gains attributed to beneficiaries in specified circumstances).
The trustees applied to the Ch D for declarations that the exercise of the power of advancement had been invalid. Norris J accepted this contention but HMRC appealed to the CA which unanimously reversed Norris J’s decision and held that the exercise of the power had been valid. Lloyd LJ held that an exercise of the power vested in trustees was ‘voidable if and only if it can be...
