Interest in possession under a trust was absent where beneficial devolution was postponed until the trust ended.

A 1/8th share under the trust deed was held not to be an interest in possession because the settlement postponed devolution of the beneficial share until the trust ended by efflux of time. The deceased therefore had only a contingent or expectant right during his lifetime, and section 23 of the Estate Duty Act, 1953, did not apply because it operates only where an existing interest under a settlement fails or determines by death before becoming an interest in possession, with subsequent limitations continuing to subsist. The facts were distinguished from the cited Supreme Court decision, where the beneficiary already had an existing beneficial entitlement and only enjoyment was postponed.

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Issues: Whether 1/8th share in the trust estate was an interest in possession so as to be included in the principal value of the deceased's estate under section 23 of the Estate Duty Act, 1953.

Analysis: The trust deed postponed the devolution of the beneficial share until the trust came to an end by efflux of time. On the terms of the settlement, the deceased had not acquired an interest in possession during his lifetime, and his right was only contingent or in expectancy. Section 23 applies only where an existing interest under a settlement fails or determines by reason of death before it becomes an interest in possession and subsequent limitations continue to subsist. The facts were materially different from the cited Supreme Court decision, where the beneficiary already had an existing beneficial entitlement and only enjoyment was postponed.

Conclusion: The 1/8th share was not an interest in possession and could not be included in the principal value of the deceased's estate. The question was answered in favour of the accountable person.

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