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Season’s greetings

Monday, 11 December 2023
Foreword: Welcome to the final issue of the Trust Quarterly Review for 2023.

This issue covers a diverse range of subjects: a review of the Common Reporting Standard (CRS), the treatment of foreign trusts in Australia, children and the issue of succession, and the first reported case on the statutory Hastings-Bass jurisdiction in the Cayman Islands.

Lucy Diggle TEP provides a review of the decision of the Grand Court of the Cayman Islands in In the Matter of Settlements made by Declarations of Trust dated 9 May 2013, which is the first published decision considering s.64A of the Cayman Islands Trusts Act (2021 Revision). Section 64A imported into statute the common-law Hastings-Bass principle. The case concerned an application by trustees to set aside transfers that had been made to three trusts. These settlements had been made without the settlors seeking tax advice. The decision in this case was that the settlements were declared void ab initio. Lucy concludes that the decision provides welcome guidance on the proper interpretative application of the statutory provision but poses the question of ‘whether any of the “conceptual thickets” of Pitt v Holt weave their way back into the jurisdiction when considering applications by those other than the trustee of the trust’.

Elsewhere, Mark Lindley TEP considers, from an English and Welsh perspective, the vexing question of how the manner in which a child (or children) might have been conceived and how the circumstances in which they are born may determine their entitlement, or not, to receive property from dispositions from a will or trust. He notes that, with the abolishment of the perpetuity rule in many jurisdictions, the determination of such person’s status to receive may occur many years after the settlor’s death. This article provides some practical options for trustees to provide certainty around a person’s status under the instrument.

Next, John J Ryan Jr has provided an overview of the basic CRS rules and the 2023 amendments that have introduced new due-diligence reporting requirements. The amendments include the creation of a separate reporting framework for electronic and digital currencies. They are expected to come into force when incorporated into law by the participating jurisdictions. The article also discusses the two competing automatic exchange of information systems: the Foreign Account Tax Compliance Act and the CRS, and the OECD’s mandatory disclosure rules.

We then move to George Psarrakos’ article on Australia’s foreign trust rules and how these may impact Australian-tax-resident beneficiaries if they receive distributions from foreign trusts. George also discusses the consequences of the inadvertent appointment of an Australian tax resident as a trustee of a foreign trust and/or executor of a foreign deceased person’s will.

This issue concludes with Ed Buckland TEP’s review of the 15th edition of Drafting Trusts and Will Trusts: A Modern Approach. As the reviewer notes, the clear and straightforward style that the original edition of this book championed remains evident in this edition but with the various updates required to cover aspects of drafting not applicable when the book was first published, such as electronic execution of wills.

We wish all our readers a happy festive season and a much-deserved holiday break.

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The Editors

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