Sham trust meaning

In this issue: Transferring property Property management Statutory compliance Property development Easements, rights and covenants Agricultural property Property taxes Key developments and horizon scanning Additional property updates this week Daily and weekly news alerts Trackers New Q&As Transferring property Valid transfer to widow of King of Saudi Arabia The Business and Property Courts in Asturion Fondation v Alibrahim [2023] EWHC 3305 (Ch) dismissed the claimant’s contention that a transfer by its Liechtenstein foundation to the defendant was invalid. The court concluded the individual acting for the claimant executed the transfer within his powers, and it did not conflict with the foundation’s purposes. See: [2024] All ER (D) 43 (Jan). Analysis to follow. Order for sale to satisfy debt—sham trust deed In Al Saud v Gibbs [2023] EWHC 3183 (Ch), the Chancery Division granted the claimant an order for sale of the first defendant’s (D1) property. D1 and the second...

Russian Coms Russian Coms was a service exploited by hundreds of offenders to place more than 1.3 million fraudulent calls, defrauding victims around the world between 2021 and 2024. This highly developed spoof-calling operation enabled scammers to ring victims while making each call appear to originate from pre-selected numbers, including financial institutions, telecommunications companies and law enforcement agencies, deceiving targets, gaining their trust and stealing their money and personal details. So advanced was the ruse that handsets were sold by criminals pre-loaded with sham applications, meaning that if the device was seized or retrieved by investigators or law enforcement officers it would appear to be a standard smartphone on casual inspection. The phones were also fitted with a burn app that erased the handset immediately, blocking any unwanted scrutiny or examination. The NCA believes that Russian Coms was deployed to target approximately 170,000 victims across the UK, resulting in financial harm totalling tens of millions of pounds. In matters reported to Action Fraud (the UK’s national reporting centre for...

Moran v HMRC [2025] UKFTT 540 (TC) For many years, the taxpayer lived in a UK home because of intricate and opaque structures arranged by her deceased husband. He purchased the property and later transferred it to a Jersey‑resident company, N Ltd, which he had set up. N Ltd was owned by a Jersey discretionary trust he had also created, the C trust. A further Jersey company, W Ltd, was owned by another Jersey discretionary trust settled by Mr Moran, the B trust. The continuing expenses of the property were covered by loans made by W Ltd to N Ltd. After her husband’s death, the taxpayer ostensibly lived in the property under a licence to occupy. HMRC issued assessments on the taxpayer under the TOAA rules for eight years. Under those rules, income would be treated as arising where a UK‑resident individual received a benefit provided out of assets that were available for that purpose as...

This Practice Note This Practice Note explores trusts and property law that may arise in family proceedings, including invalid or sham trusts, and property law questions such as proprietary estoppel and improper transfers. It also addresses when deploying these areas may aid a party in family cases, together with the evidence needed to advance trusts or property law submissions. The court may vary a settlement within section 24(1)(c) of the Matrimonial Causes Act 1973 (MCA 1973) or Schedule 5, Part 2 to the Civil Partnership Act 2004 (CPA 2004) (see Practice Note: Trusts—variation of a nuptial settlement), or treat trust assets as a financial resource of a party (see: Introduction to trusts within financial proceedings—Trusts as a financial resource). The court may further take account of trust assets by making findings and/or granting relief grounded in trusts or property law that go to the substance of the relevant trust arrangements. For family law practitioners, the principal trust/property issues are whether: the trust is invalid (see: Invalidity)...

The issue of sham Claims of sham most commonly arise from the settlor’s creditors or an ex‑spouse in matrimonial litigation, asserting that property placed with the trustees in truth remains the settlor’s, and is therefore reachable to satisfy a court order. Where a trust is declared a sham, it will typically be void and the trust fund will revert to the settlor. A sham is a pretence: the settlor and, potentially, the trustees do not possess the requisite intention to establish a genuine trust. Instead, they aim to project to outsiders and to the court that a valid trust exists by ostensibly conveying legal title to the trustees and the equitable interest to beneficiaries, whilst in fact the settlor keeps ownership, aided—knowingly or not—by the trustees acting as principal and agent or nominee under a bare trust for the settlor. The decisive element is the intention to mislead. Such challenges are particularly attractive when enforcement prospects depend on bringing the assets within reach of judgment creditors. In substance, the...

Private Client England & Wales glossary A Abatement When, after settling the deceased’s funeral costs, debts and liabilities, the remaining estate cannot satisfy all legacies in full, the gifts are reduced accordingly, unless the Will shows a different intention. In a solvent estate, the order for reduction appears in Part II of Schedule 1 to the Administration of Estates Act 1925. Refer to Practice Note: Payment of legacies. Accruals basis Where income is taxed on an accruals basis, it is attributed to a given tax year by reference to the number of days within that year during which the activity giving rise to the liability accrued. See Practice Note: What is the basis of income tax?. Accumulation and maintenance (A&M) trust A form of non‑interest in possession trust designed to benefit children and young people up to 25, which received favourable inheritance tax treatment between 1975 and 2006. See Practice Note: Accumulation and maintenance trusts—IHT [Archived]. Accredited Legal Representative (ALR) ...