Trustee occupation of settled property for management purposes is not a reserved settlor interest under estate duty law.

A trustee's rent-free occupation of one flat in settled property, when attached to the office of trustee and used for trust administration, was not a personal reservation of interest by the settlor under section 12 of the Estate Duty Act, 1953. The deceased was found to occupy the property as trustee, not as settlor, and no life interest or death-linked determinable interest was reserved in her favour. Section 12 therefore did not apply, the property was not treated as passing on the settlor's death for estate duty purposes, and no estate duty arose on that basis.

---

---

Issues: Whether the right of a settlor-trustee to occupy one flat in the settled property rent-free was a reserved interest attracting estate duty under section 12 of the Estate Duty Act, 1953.

Analysis: The settlement covered the entire property and the clause permitting a trustee to occupy one flat was part of the management arrangement for better administration of the trust. The right of occupation was attached to the office of trustee and was available to whoever held that office, rather than being a personal reservation in favour of the settlors as such. The deceased was found to be in possession of the property as trustee and not as settlor, and no interest in the settled property was reserved to her for life or for a period determinable by reference to death.

Conclusion: Section 12 was not attracted and the question was answered in the negative, against the Revenue.

Final Conclusion: The property did not pass on the settlor's death within the meaning of section 12, and no estate duty was chargeable on that basis.

Ratio Decidendi: A right to occupy trust property that is annexed to the office of trustee for management purposes, and not reserved personally to the settlor, is not an interest reserved to the settlor within section 12 of the Estate Duty Act, 1953.

---