Trust deed interpretation excludes settled properties from estate duty where lifetime management was reserved for the settlor as trustee.

Immovable properties settled under a 5 March 1961 deed were treated as having been placed in trust immediately, rather than remaining the settlor's absolute estate for estate duty purposes. The deed was construed as a whole, with emphasis on the settlor's long use of the properties for the Ashram, the description of the properties and trustees, the settlor's age and circumstances, and the continued post-execution management of the properties. Reservation of management powers during the settlor's lifetime was consistent with her acting as sole trustee for life, with trustees succeeding after death. Accordingly, the properties did not pass on death under section 6 of the Estate Duty Act, 1953 and were not includible in the principal value of the estate.

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Issues: Whether the immovable properties covered by the settlement deed dated 5 March 1961 passed on the death of the deceased so as to be includible in the principal value of the estate under section 6 of the Estate Duty Act, 1953.

Analysis: The settlement deed had to be read as a whole and in the light of the settlor's long-standing use of the properties for the Ashram, the age and circumstances of the settlor, the description of the properties and trustees in the deed, and the continued management of the properties after execution of the deed. The reservation of management powers during the settlor's lifetime was held to be consistent with an intention to create a trust immediately and to constitute the settlor as the sole trustee for life, with the trustees taking over after her death. The later sale deed describing her as trustee further supported that the properties were thereafter held in trust and not as her absolute estate.

Conclusion: The properties did not pass under section 6 of the Estate Duty Act, 1953 on the death of the deceased and were not includible in the principal value of the estate.

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