Property - Real property- freehold land
ownership and - Personal property- all property except freehold e.g. chattels, choses in
transfer action, leasehold land
Transfers of Title when the Donor Owns the Legal Title
- Transferor must execute a deed (s 52(1) of the LPA 1925 (stated as
deed and in the presence of witness who also signs)
- When the land is registered- deed is Form TR1, issued by Land
Registry, deed must be sent to Land Registry to register the T as the
new legal owner
Shares in a company
Shares in private companies- outside the CREST system
- Shareholder will have certificate to show he is registered (evidence of
ownership, registration constitutes legal ownership
Basic Method of Stock Transfer
- 1.Transferor signs stock transfer form (as per s 1 of the Stock Transfer
Act 1963).
- 2. Transferor hands form and share certificate to transferee
- 3. Transferee sends documents to the company for registration (legal
title passes upon registration, which may take a week).
- 4. Company issues new share certificate to the transferee.
- Alternative: Transferor can send the documents directly to the
company on behalf of the transferee.
Shares within the CREST system
- Shareholdings recorded electronically by an organisation (member of
CREST)
- Transfers recorded electronically without stock transfer form-
registration and transfer of legal title is immediate
- However, where a public quoted company has not dispensed with
share certificates as evidence of ownership, the paper-based system
will apply
Money
- Transfer of rights is effective immediately
Cheques signed in favour of transferee
- Donor can revoke this mandate by stopping the cheque before the
done has presented it to the donor’s bank
Debit cards
- Mandate to the bank to pay the shop- instruction is immediate, before
presentation
Chattels
- Passed by physical delivery of the asset to the transferee or by deed
- Jaffa v Taylor Gallery Ltd- valid without physical delivery
Digital assets
- Cryptoassets like Bitcoin to be treated as property
- B2C2 v Quoine Pte Ltd [2019]- Bitcoin can be the subject matter of a
trust
Ways of Giving in Turner LJ in Milroy v Lord, three ways settlor/donor can gratituously provide
Lifetime for another:
- Outright gift to the donee
- Transfer to trusees for B’s benefit
- Declaration of self as T for the person to be benefited
- If one mode fails, court won’t pretend another mode was intended
, When a person dies, the net value of any assets over the nil rate band
(£325,000) will be charged to inheritance will be charged to inheritance tax at
40%- most lifetime gifts are regarded as ‘potentially exempt transfers’ (PETS)
- If donor survives pet by 7 years, it escapes inheritance tax
- If they die within the seven years, attracts more generous inheritance
tax than gift on death
- 20% inheritance charged on lifetime creation of a trust is settlor
survives more than 7 years
Requirements for Requitements for a valid gift
a valid gift 1. Necessary mental capacity
- Re Beaney [1978]- higher degree of understanding is sometimes
necessary
2. Intention by word or conduct
3. Certainty of subject matter and objects
4. Transferred in the correct manner
- Deed for land, stock transfer form and registration for shares
Defective transfers and the role of equity
- Donor has no legal right to demand the return of a perfect gift
- Richards v Delbridge- equity will not assist a volunteer (an intended
recipient who had not given value and cannot sue intended donor)
Every effort test
- Transfer regarded as complete in equity if the donor has done
everything in their power to put the property beyond his recall- only
outstanding matters are the actions of third parties
- Re Rose- court implied a constructive trust to recognise the relative
positions of Mr and Mrs Rose
- Mascall v Mascall- possession of a transfer deed was sufficient to
enable registration, required documents no longer in donor’s control
The rule in Strong v Bird
- Exception to ‘equity will not perfect an imperfect gift’
- Applies on the death on the intended donor and the done can claim
the property in priority to those entitled to the rest of the estate
- Four conditions must be met:
- 1)Donor intends to make an immediate gift to the done but doesn’t
comply with formalities
- 2)Intention must be to make an immediate gift not a conditional one
(Re Freeland)[1952)
- 3)Intention to give must be unchanged until the donor’s death (Re
Gonin) [1979]
- 4)The donor dies and the done is appointed the donor’s executor or
administrator (the donor’s PR)
Requirements for - Express trust- one which the settlor intends to create, as opposed to
Lifetime Creation one created by operation of law (e.g. resulting trust or a constructive
of an Express trust)
Private Trust - Private trust- one for private individuals (or rarely, private purpose) as
opposed to a public trust
Methods of Creation of Express Trusts
Transfer to Trustees
1) Transfer to T to constitute the trust
2) S must declare the trust- tell T to hold property on trust, identify the
, B’s, their shares and terms to benefit on
3) Satisfy three certainties, declaration often set out in trust instrument
4) Work out whether writing is necessary under formalities
Declaration of self as sole trustee
1) Declaration of self as trustee, identify trust property and B’s and terms
of trust, three certainties, written doc desirable
2) No transfer needed, legal title with S/T- trust is automatically
constituted
- Choithram(T) International SA v Pagarani [2001]- an imperfect
transfer to trustees is perfected if the settlor is also one of the
trustees
Requirements for creation of a valid trust
S must:
- Make a valid declaration of trust and
- Ensure the property is properly vested in the T’s (constitution of the
‘trust’)
Valid declaration must observe the following:
- Three certainties
- Comply with the beneficiary principle
- Satisfy the rules against perpetuity and
- Complete any formalities for express declarations of trust
The three certainties (Lord Langdale in Knight v Knight)
Certainty of intention on part of S or testator to create a trust
- ‘Equity looks to intent rather than form’- any wording or conduct
which manifests to an intention to impose the trust obligation on the
trustee will be sufficient
- Paul v Constance [1977]- words and conduct amounted to an express
declaration of trust
- Insufficient to use precatory words (Re Adams and Kensington Vestry)
[1884]
Certainty of subject matter (description of trust property and interest of B’s)
- Setttlor or testator must identify the trust property clearly
- Palmer v Simmonds- what constitutes a ‘bulk of the estate’?
- Re London Wine Company (Shippers) Ltd [1986]- had to identify
which chattels out of a larger collection of chattel he intended to form
the subject matter of the trust
- Hunter v Moss- different from Re London Wine Company which was
concerned with appropriation of chattels which is different from a
declaration of trust
- Re Lewis’s of Leicester Ltd [1995]- subject matter was certain because
by placing the money in a separate account, it had been segregated
from Lewis’s other money
- Mac-Jordan Construction Ltd v Brookmount Erostin Ltd [1992]- the
rention monies had not been segregated from Brookmount’s other
funds
- Subject matter is certain if S gives a workable formula for calculating
the amount (Re Golay)
ii) certainty of beneficial interest
- S must define extent of B’s interest, does not need to specify the exact
, share (e.g. discretionary trust)
- Where there is a group of B’s but extent not specified, share is
assumed to be equal
- Nature of B’s interest must be clear- life interest or absolute interest,
contingent?
- If the trust fails for lack of certainty of subject matter- resulting trust
back to the S or if in will, the testator’s estate
Certainty of objects: sufficient identification of the B’s or objects
- Define B’s with sufficient clarity when declaring the trust
- If trust fails, T holds the trust property on a resulting trust for the
settlor
Fixed trusts
- T have no discretion
- Outright gifts are likely to be fixed
- Test for certainty of objects in a fixed trust is the complete list test
(IRC v Broadway Cottages Trust)[1955]- must be possible to draw up a
comprehensive list of each and every beneficiary otherwise the trust
fails
- ‘A complete list’- B’s must have conceptual certainty and evidential
certainty
- OT Computers Ltd v First National Tricity Finance Ltd [2003]- failed
through lack of certainty of objects
Discretionary trusts
- Someone chooses (usually T but not necessarily) from a class of B’s
who are to receive, the proportion, income or capital (Warner J in
Mettoy Pension Trustees Ltd v Evans)
- Flexibility
- Until any possible B is selected, no object has equitable interest, only
has a hope (‘a spes’)
- McPhail v Doulton- certainty of objects test- the given postulant test
- The given postulant test- ‘the trust is valid if it can be said with
certainty that any individual (or postulant ) is or is not a member of
the class
- Conceptual or linguistic certainty needed to pass the test- sufficient
criteria in the description of the objcts
- Re Baden’s Deed Trust (No 2) [1973]- discretionary trust for the
relatives of employees and ex-employees was valid- possible to work
out who they were
Lord Wilberforce- alternative means by which the trust is enforced
(breach of duty):
- Appoint new trustees in place of those who have not executed the
trust
- Request or authorise a representative of the objects to draw up a
scheme for distribution
- Order the trustees to distribute on the basis of an appropriate scheme
for distribution
Administrative unworkability and capriciousness
- Trust can fail if class is too big- Lord Wilberforce in Mcphail v Doulton,
ownership and - Personal property- all property except freehold e.g. chattels, choses in
transfer action, leasehold land
Transfers of Title when the Donor Owns the Legal Title
- Transferor must execute a deed (s 52(1) of the LPA 1925 (stated as
deed and in the presence of witness who also signs)
- When the land is registered- deed is Form TR1, issued by Land
Registry, deed must be sent to Land Registry to register the T as the
new legal owner
Shares in a company
Shares in private companies- outside the CREST system
- Shareholder will have certificate to show he is registered (evidence of
ownership, registration constitutes legal ownership
Basic Method of Stock Transfer
- 1.Transferor signs stock transfer form (as per s 1 of the Stock Transfer
Act 1963).
- 2. Transferor hands form and share certificate to transferee
- 3. Transferee sends documents to the company for registration (legal
title passes upon registration, which may take a week).
- 4. Company issues new share certificate to the transferee.
- Alternative: Transferor can send the documents directly to the
company on behalf of the transferee.
Shares within the CREST system
- Shareholdings recorded electronically by an organisation (member of
CREST)
- Transfers recorded electronically without stock transfer form-
registration and transfer of legal title is immediate
- However, where a public quoted company has not dispensed with
share certificates as evidence of ownership, the paper-based system
will apply
Money
- Transfer of rights is effective immediately
Cheques signed in favour of transferee
- Donor can revoke this mandate by stopping the cheque before the
done has presented it to the donor’s bank
Debit cards
- Mandate to the bank to pay the shop- instruction is immediate, before
presentation
Chattels
- Passed by physical delivery of the asset to the transferee or by deed
- Jaffa v Taylor Gallery Ltd- valid without physical delivery
Digital assets
- Cryptoassets like Bitcoin to be treated as property
- B2C2 v Quoine Pte Ltd [2019]- Bitcoin can be the subject matter of a
trust
Ways of Giving in Turner LJ in Milroy v Lord, three ways settlor/donor can gratituously provide
Lifetime for another:
- Outright gift to the donee
- Transfer to trusees for B’s benefit
- Declaration of self as T for the person to be benefited
- If one mode fails, court won’t pretend another mode was intended
, When a person dies, the net value of any assets over the nil rate band
(£325,000) will be charged to inheritance will be charged to inheritance tax at
40%- most lifetime gifts are regarded as ‘potentially exempt transfers’ (PETS)
- If donor survives pet by 7 years, it escapes inheritance tax
- If they die within the seven years, attracts more generous inheritance
tax than gift on death
- 20% inheritance charged on lifetime creation of a trust is settlor
survives more than 7 years
Requirements for Requitements for a valid gift
a valid gift 1. Necessary mental capacity
- Re Beaney [1978]- higher degree of understanding is sometimes
necessary
2. Intention by word or conduct
3. Certainty of subject matter and objects
4. Transferred in the correct manner
- Deed for land, stock transfer form and registration for shares
Defective transfers and the role of equity
- Donor has no legal right to demand the return of a perfect gift
- Richards v Delbridge- equity will not assist a volunteer (an intended
recipient who had not given value and cannot sue intended donor)
Every effort test
- Transfer regarded as complete in equity if the donor has done
everything in their power to put the property beyond his recall- only
outstanding matters are the actions of third parties
- Re Rose- court implied a constructive trust to recognise the relative
positions of Mr and Mrs Rose
- Mascall v Mascall- possession of a transfer deed was sufficient to
enable registration, required documents no longer in donor’s control
The rule in Strong v Bird
- Exception to ‘equity will not perfect an imperfect gift’
- Applies on the death on the intended donor and the done can claim
the property in priority to those entitled to the rest of the estate
- Four conditions must be met:
- 1)Donor intends to make an immediate gift to the done but doesn’t
comply with formalities
- 2)Intention must be to make an immediate gift not a conditional one
(Re Freeland)[1952)
- 3)Intention to give must be unchanged until the donor’s death (Re
Gonin) [1979]
- 4)The donor dies and the done is appointed the donor’s executor or
administrator (the donor’s PR)
Requirements for - Express trust- one which the settlor intends to create, as opposed to
Lifetime Creation one created by operation of law (e.g. resulting trust or a constructive
of an Express trust)
Private Trust - Private trust- one for private individuals (or rarely, private purpose) as
opposed to a public trust
Methods of Creation of Express Trusts
Transfer to Trustees
1) Transfer to T to constitute the trust
2) S must declare the trust- tell T to hold property on trust, identify the
, B’s, their shares and terms to benefit on
3) Satisfy three certainties, declaration often set out in trust instrument
4) Work out whether writing is necessary under formalities
Declaration of self as sole trustee
1) Declaration of self as trustee, identify trust property and B’s and terms
of trust, three certainties, written doc desirable
2) No transfer needed, legal title with S/T- trust is automatically
constituted
- Choithram(T) International SA v Pagarani [2001]- an imperfect
transfer to trustees is perfected if the settlor is also one of the
trustees
Requirements for creation of a valid trust
S must:
- Make a valid declaration of trust and
- Ensure the property is properly vested in the T’s (constitution of the
‘trust’)
Valid declaration must observe the following:
- Three certainties
- Comply with the beneficiary principle
- Satisfy the rules against perpetuity and
- Complete any formalities for express declarations of trust
The three certainties (Lord Langdale in Knight v Knight)
Certainty of intention on part of S or testator to create a trust
- ‘Equity looks to intent rather than form’- any wording or conduct
which manifests to an intention to impose the trust obligation on the
trustee will be sufficient
- Paul v Constance [1977]- words and conduct amounted to an express
declaration of trust
- Insufficient to use precatory words (Re Adams and Kensington Vestry)
[1884]
Certainty of subject matter (description of trust property and interest of B’s)
- Setttlor or testator must identify the trust property clearly
- Palmer v Simmonds- what constitutes a ‘bulk of the estate’?
- Re London Wine Company (Shippers) Ltd [1986]- had to identify
which chattels out of a larger collection of chattel he intended to form
the subject matter of the trust
- Hunter v Moss- different from Re London Wine Company which was
concerned with appropriation of chattels which is different from a
declaration of trust
- Re Lewis’s of Leicester Ltd [1995]- subject matter was certain because
by placing the money in a separate account, it had been segregated
from Lewis’s other money
- Mac-Jordan Construction Ltd v Brookmount Erostin Ltd [1992]- the
rention monies had not been segregated from Brookmount’s other
funds
- Subject matter is certain if S gives a workable formula for calculating
the amount (Re Golay)
ii) certainty of beneficial interest
- S must define extent of B’s interest, does not need to specify the exact
, share (e.g. discretionary trust)
- Where there is a group of B’s but extent not specified, share is
assumed to be equal
- Nature of B’s interest must be clear- life interest or absolute interest,
contingent?
- If the trust fails for lack of certainty of subject matter- resulting trust
back to the S or if in will, the testator’s estate
Certainty of objects: sufficient identification of the B’s or objects
- Define B’s with sufficient clarity when declaring the trust
- If trust fails, T holds the trust property on a resulting trust for the
settlor
Fixed trusts
- T have no discretion
- Outright gifts are likely to be fixed
- Test for certainty of objects in a fixed trust is the complete list test
(IRC v Broadway Cottages Trust)[1955]- must be possible to draw up a
comprehensive list of each and every beneficiary otherwise the trust
fails
- ‘A complete list’- B’s must have conceptual certainty and evidential
certainty
- OT Computers Ltd v First National Tricity Finance Ltd [2003]- failed
through lack of certainty of objects
Discretionary trusts
- Someone chooses (usually T but not necessarily) from a class of B’s
who are to receive, the proportion, income or capital (Warner J in
Mettoy Pension Trustees Ltd v Evans)
- Flexibility
- Until any possible B is selected, no object has equitable interest, only
has a hope (‘a spes’)
- McPhail v Doulton- certainty of objects test- the given postulant test
- The given postulant test- ‘the trust is valid if it can be said with
certainty that any individual (or postulant ) is or is not a member of
the class
- Conceptual or linguistic certainty needed to pass the test- sufficient
criteria in the description of the objcts
- Re Baden’s Deed Trust (No 2) [1973]- discretionary trust for the
relatives of employees and ex-employees was valid- possible to work
out who they were
Lord Wilberforce- alternative means by which the trust is enforced
(breach of duty):
- Appoint new trustees in place of those who have not executed the
trust
- Request or authorise a representative of the objects to draw up a
scheme for distribution
- Order the trustees to distribute on the basis of an appropriate scheme
for distribution
Administrative unworkability and capriciousness
- Trust can fail if class is too big- Lord Wilberforce in Mcphail v Doulton,
