Law:

Section:

Section 12 of the Estate Duty Act 1953 - Property which deemed to pass - Settlements with reservation - Deceased "M" and her sister "J" settled certain shares in trust under which net income of trust was to be paid to settlors during their respective lives absolutely and on and after death of survivor to their brother, for life and after his death to trustees of charitable trust for charitable purposes - On death of "J", deceased and her brother jointly executed a deed of renunciation and modification under which quarterly payment to trustees of "P" was fixed, brother renounced his reversionary interest completely and deceased, relinquished and renounced her right and interest in income of trust fund to extent of 35 per cent - In estate duty assessment of sister "J" it was already held by department that 50 per cent of corpus fund had brought in by "J" - Accountable person offered 65 per cent of trust property for estate duty as trust property passed on her death under section 5 - However Astt. Controller held that entire value of trust properties was chargeable to estate duty as property deeming to pass on death of deceased under section 12 which was upheld by Board - Whether 50 per cent of corpus fund, it must be deemed to have passed on death of deceased because she had reversed life interest to herself in income of property by deed of settlement - Held, yes - Whether by operation of section 5 only 65 per cent of that 50 per cent representing sisters share in trust corpus could be said to have passed deceased on his death - Held, yes FACTS By a deed the deceased, and her sister, "J" settled certain shares and securities on trust. Under the trust deed, the net income of the trust was to be paid to the settlers during their respective lives absolutely and on and after the death of the survivor to their brother, for life and after his death to the trustees of the charitable trust for charitable purposes. Thereafter by a deed of modification was provided that a properly fixed payment should be made to the trust "P". "J" died on leaving the deceased, as the sole surviving settlor, and her brother, as the reversionary life tenant thereafter the deceased and he…

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