Interest in possession under a trust deed can vest despite delayed transfer, making the property chargeable to estate duty on death.

A beneficiary was held to have an interest in possession where the trust deed entitled him to the shares and accumulated income from the date of settlement, even though actual transfer was postponed until he reached twenty-five. The trustees' power to apply income for maintenance and advancement, and to accumulate the balance for his benefit, did not defer vesting of the beneficial interest. Because the interest had already vested in possession, the property did not fall within the exemption for settled property whose interest fails before becoming an interest in possession. The shares and accumulated income were therefore property passing on death and were correctly subjected to estate duty.

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Issues: Whether the deceased beneficiary's interest under the trust deed in the shares and accumulated income was an interest in possession or only a future/contingent interest, and whether estate duty was chargeable on that property on his death.

Analysis: The trust deed showed that the beneficiary became entitled to the shares and the income from the date of the deed, though actual transfer was postponed until he attained twenty-five years. The trustees' power to apply income for maintenance and advancement, and to accumulate the surplus for the beneficiary's benefit, did not postpone vesting of the beneficial interest. On the beneficiary's death, the shares and accumulated income did not fall within the exemption for settled property where the interest fails before becoming an interest in possession, because the interest had already vested in possession. The property therefore constituted "property" and "property passing on death" within the Estate Duty Act.

Conclusion: The deceased had an interest in possession in the shares and accumulated income, and estate duty was correctly levied; the contention that Section 23 of the Estate Duty Act, 1953 applied was rejected.

Ratio Decidendi: Where a beneficiary is beneficially entitled to property and its income from the date of the settlement, postponement of actual transfer does not prevent the interest from being one in possession, and such property is chargeable to estate duty on death.

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