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CRC v Trustees of the Peter Clay Discretionary Trust
The trustees of a discretionary trust claimed that their expenses relating to the management of the trust were to be treated as income expenses for the purposes of TA 1988, s 686(2AA).
The Special Commissioners held that a fair balance should be reached between income and capital expenses. HMRC appealed, and the trustees cross-appealed.
The High Court found that within the general law of trusts, trustees' expenses should be regarded as a capital expense. The Special Commissioners had erred in law in saying that they should be apportioned.
HMRC's appeal was allowed in part, and the trustees' cross appeal was dismissed.
CRC v Trustees of the Peter Clay Discretionary Trust, Chancery Division, 15 November 2007
