Hastings-Bass does not apply

Two cases came before the Court of Appeal. Both concerned the Hastings-Bass rule (see Re Hastings-Bass [1974] STC 211).

Under the rule a decision of the trustees could be declared void even many years after the event if they had failed to consider relevant matters when exercising their power to make the decision.

In Pitt v Holt the High Court had agreed a settlement be set aside because of the inheritance tax implications which had been unwittingly included.

In Futter v Futter the court allowed Hastings-Bass to be used to void a transaction made by trustees.

HMRC appealed in each case.

The Revenue argued that the Hastings-Bass rule did not justify a conclusion that the relevant dispositions were void or even voidable. It was wrong to treat the acts of either the claimants in Pitt or the...