Vested trust interest and not contingent succession: corpus interest remains transferable and taxable on valuation.

A trust deed should be read as a whole, and a future interest is treated as vested unless the instrument clearly imposes a condition precedent. The deed here showed an intention to benefit the beneficiary through intermediate income, because the trustees were required to apply net income, or part of it, for his and his wife's benefit, and any surplus accumulation also accrued to him. Clauses referring to a general power of appointment and a gift over to the beneficiary's heirs further indicated postponed enjoyment rather than a mere chance of succession. Such an interest is capable of transfer and valuation, so the corpus interest was liable to wealth-tax valuation.

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Issues: Whether the assessee's interest in the corpus of the trust property was a vested interest or only a contingent interest / spes successionis, and whether its value could therefore be taken into account for wealth-tax purposes.

Analysis: The trust deed had to be construed as a whole, with a presumption in favour of vesting unless a condition precedent was expressed with reasonable clearness. The provision for intermediate income was not a mere discretionary benefit: the trustees were required to apply the net income, or such portion as they deemed fit, for the benefit of the assessee and his wife, and the accumulation of surplus income also enured to the assessee's benefit. The corpus was therefore not left to a mere chance of succession. A future interest of this kind, even if postponed until a specified date, is not a spes successionis and is capable of transfer and valuation. The surrounding clauses, including the general power of appointment and the gift over to the assessee's heirs, further indicated an intention to confer a vested interest with postponed enjoyment.

Conclusion: The assessee's interest in the corpus was a vested interest, not a spes successionis or merely contingent interest, and it was liable to valuation for wealth-tax purposes.

Final Conclusion: The reference was answered against the assessee and the revenue's position on valuation of the corpus interest was upheld.

Ratio Decidendi: Where the whole instrument shows an intention to benefit the donee in the intermediate income and the corpus is to pass on a future date, the interest is vested unless a clear condition precedent makes it contingent.

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