What is the ratio in IRC v Broadway Cottages Trust?

Discretionary trusts must satisfy the 'complete list' test, requiring trustees to be able to compile a comprehensive list of all possible beneficiaries for the trust to be valid.

What did the court decide in IRC v Broadway Cottages Trust?

The Court of Appeal held that the discretionary trust was void for uncertainty because trustees could not compile a complete list of all possible beneficiaries.

Why is IRC v Broadway Cottages Trust important for equity and trusts?

Although later overruled, it established the historical 'complete list' test and shows the evolution from strict to more liberal approaches to certainty of objects.

What is the ratio in IRC v Broadway Cottages Trust?

Discretionary trusts must satisfy the 'complete list' test, requiring trustees to be able to compile a comprehensive list of all possible beneficiaries for the trust to be valid.

What did the court decide in IRC v Broadway Cottages Trust?

The Court of Appeal held that the discretionary trust was void for uncertainty because trustees could not compile a complete list of all possible beneficiaries.

Why is IRC v Broadway Cottages Trust important for equity and trusts?

Although later overruled, it established the historical 'complete list' test and shows the evolution from strict to more liberal approaches to certainty of objects.

Equity & Trusts1 min read

IRC v Broadway Cottages Trust

[1955] Ch 20Court of Appeal1955

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“Discretionary trusts required complete list of all possible beneficiaries for validity.”

Facts

A trust was established for the benefit of a class described as 'such persons or person as the trustees think have helped or may help the settlor'. The Revenue challenged the validity of the trust on grounds of uncertainty of objects.

Issues

What test should apply to determine certainty of objects in discretionary trusts?

Held

The Court of Appeal held that discretionary trusts must satisfy the 'complete list' test - trustees must be able to compile a comprehensive list of all possible beneficiaries. The trust failed this test and was void for uncertainty.

Significance

This case established a strict approach to certainty that made many discretionary trusts invalid and limited their usefulness. It was later overruled by McPhail v Doulton, which adopted a more liberal approach. However, it remains important for understanding the historical development of certainty principles.

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OSCOLA Citation

IRC v Broadway Cottages Trust [1955] Ch 20

Equity & TrustsCertainty of ObjectsDiscretionary TrustsTrust Validity

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