It is true that where, as here, neither interest is in any way hypothecated or charged, the function of the trustees is simple, but that does not change the inherent character of the function, for the functional possibilities are present, and might at any time be invoked.

Nelson v. Adamson was distinguished as a decision as to what the income arose from, within the meaning of the Income Tax Acts of the United Kingdom. This is the same interpretation of Baker as that by Lord Morison in Reid’s Trustees.59

Nelson v. Adamson had its vindication in Victoria in New Zealand Insurance Co. Ltd. v. CPD. In this case, at the relevant time, after distribution and administration of the will trust of the father, two daughters had life interests in the remainder of the residuary estate as tenants in common in equal shares with power of appointment in respect of the capital and income of their respective shares. The father’s estate included shares in Victorian companies but the administration of the trusts of the estate was situate in New Zealand. One daughter exercised her power of appointment before her decease. The question was whether she had in Victoria ‘property over or in respect of which [she] had at the time of [her] death a general power of appointment‘. Such property would be subject to Victorian probate duty. The court held that she had a general power of appointment over half the undivided interest in the property the subject of the trusts that included the shares in Victorian companies; and that therefore probate duty was assessable to the extent of the value of one-half of those company shares. The court saw ‘no basis in logic or reason for not applying the principles laid down in the Archer-Shee cases’to a trust under which two or more persons are concurrently entitled to trust property as tenants in common for life. In the joint judgment of Winneke CJ and Menhennitt J, Stannus was distinguished but approved in the following terms: The survey of Baker in private trusts should not be concluded without a note on CSD (QId.) v. Livingston, though it is a case of unadministered estate. The issue was whether a residuary legatee in an unadministered estate of a testator who died domiciled in New South Wales, comprising assets in Queensland, has a beneficial interest in property situated in Queensland and if she has, on her death her estate will be subject to duty under Queensland’s Succession and Probate Duties Acts. The facts were similar to the those appearing in cases studied so far except that the estate of the testator was in the course of administration. The Privy Council held that for an estate in the course of administration, there was no trust fund consisting of any gift to any beneficiary in which he could be said to have any beneficial interest because no trust had as yet come into existence to affect the asset of the estate; that the deceased’s property was vested in the personal representative in full right and no beneficial interest in any item of property belonged to any beneficiary; and that the beneficiary was only entitled to a chose in action, capable of being invoked for any purpose connected with the proper administration of the estate. There is no doubt that the Board’s opinion depends on ‘the peculiar status which the law accorded to an executor for the purposes of carrying out his duties of administration‘.66 Apart from that, the Board must have been influenced by the fact that an executor in the course of administration has continuing duties ‘to preserve the assets, to deal properly with them, and to apply them in a due course of administration for the benefit of those interested according to that course, creditors, the death duty authorities, legatees of various sorts, and the residuary beneficiaries’. Was this akin to the reasoning of Stannus, where the court refused to apply Baker to more than one beneficiary?

Funds

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